Predicting real estate listings, unit sales, and dollar volume in any economy is difficult at best. However, it is possible to a degree, depending on how well you have studied your market area over a reasonable amount of years. Of course none of us wish to be wrong or appear to not know what we are talking about. Well, that just happens to be the Dark Hole we enter when we take the risk of predicting anything.
The important thing is that it doen't matter whether you are right or wrong but what you can share with others and what you can take away from the experience. So lets review the results of my predictions for 2009 and have a peek at my ----PREDICTIONS FOR 2010.
(1) Employment will remain strong in Fredericton throughout 2009?----Yes, I was right and I take from this that I can predict that employment will continue to remain strong throughout 2010. That's real good news if I am right again.
(2) Interest rates will remain strong at aroung the 4 to 5 per centage range. Yes, that has certainly held well. In fact it even stablized at closer to the 4% range. What we can take from that is it appears it will remain at the 4% range throughout 2010. Certainly at least until June 30,2010. The latter part of the year is a little more unpredictable due to global volitily.
(3) Immigration will remain as strong as it was in 2008. Yes, that has come to be. Again, because there is this great interest in the Province bringing in immigrants to New Brunswick it appears that this trend will continue thoughout 2010 just as strong and maybe even stronger than 2008 or 2009.
(4) Independent Mortgage Brokers will flourish as conventional banks tighten up their lending practices. No, that did not happen. In fact the banks must have read my predictions because they actually loosened up there lending practices to the joy of many promising buyers. Which I might add assisted greatly in affording the very successful market we enjoyed throughout 2009. Let's hope they continue this school of thought. Because of our strong economic economy I believe they will be happy to lend unabated throughout 2010.
(5) Appraisers will flourish as homes values drop. No, homes values not only did not drop but they went up a whopping 10% over 2008 prices. I expect this will change in 2010 and prices will be about the same or go down slightly to about the 5% range.
(6) Smaller and more conservative priced homes will sell much faster than big ticket homes. Yes, that did turn out to be true. However, I don't think they did because of a tighter economy but because they would have anyway, because there are predictably more buyers in the smaller price range historically. For 2010 both smaller priced homes and expensive homes will sell will throughout the year.
(7) Location, location, location will not be as much a factor to buying as most consumers will only be too happy to pay less for a home farther from the city center. No, this did not happen as predicted. Mainly, because gas prices went down quicker than expected and the market remained strong throughout the year and in fact there was no change in purchasing locations from 2008. People just continued to buy in the same geographical areas they purchased in 2008. This trend will continue throughout 2010.
(8) Listing portfolios will increase and sales will decrease proportionally at about 10% as there will be less buyers on the market throughout 2009. No, wrong! The opposite happened. Listings decreased at -6% by year end and sales increase at a plus +4% by year end. I really love to be wrong here. However, I should point out that units did decrease by only -1% by year end. My predictions here for 2010 is that listings will be down about 20% by year end and sales will be down about 20% also. The reason is that condo building is about at an end and the market will cool as government projects come to a screaming halt. Sorry, but this is what my crystal ball tells me.
(9) Condo sales will remain strong as consumers will opt for condos over single family homes. Yes, this did happen and this trend will continue throughout 2010 as there are a lot of condos which did not sell in 2009. The good news is that this over supply of condos will furnish sales for the first quarter of 2010. Thus, helping us to get a good early start in sales for 2010. Condo building will continue to lesson throughout 2010.
(10) Cottage sales will suffer as consumers look to conserve their disposable income. Yes, there were very little cottage sales throughout 2009. However, because the global economies appear to be strengthening, cottage sales should be stronger throughout 2010.
(11) Commercial real estate sales will suffer as lending institutions will be reluctant to finance commercial buildings. Yes, right! Commercial does remain difficult to finance. Howver, again with our strong economic expectations for 2010 I believe this will be a new shining light for 2010, in that commercial will be a way for banks to dispose of their great over supply of cash which they have little market demand throughout 2010.
(12) Credit will be tight. No, wrong! In fact, other than in the first quarter of 2009 credit was not tight at all. The loosening of credit in the last 3 quarters of 2009 really was a beacon of light to an otherwise recessionary 2009. Great going Banks for all your help in fording up our economy for 2009. I expect this to continue throughout 2010.
(13) Builders will build as much as 40% less homes for 2009 as compared to 2008. Yes, right! Builder were scared in 2009. In fact, they mostly would only build custom homes(meaning they only built pre-sold homes) for buyers. There were practically no spec. homes built compared to 2008. My prediction is that that will change throughout 2010 as our strong economic outlook will bolster the builders confidence to build more spec. homes throughout 2010. We will see!!!
(14) New construction in apartment buildings will be almost totally dead for 2009 as supply has all but caught up to demand. Yes, this turned out to be quite accurate as there was little demand for tenant accomodation. This trend is expected to continue throughout 2010.
(15) The number of real estate salespeople will start to dwindle as we enter 2009. Yes, this was true early in 2009. However, it came to a sceaming halt as the ecomomy strengthened and salespeople realized that it might not be such a bad market after all. In fact, we ended up with almost as many salespeople by December 31,2009 as we had at December 31,2008. I believe this will not change much throughout 2010. In fact, until we experience a down market the sales force for Fredericton will be constant.
Well Folks, there is my synopsis for 2009 and my predictions for 2010 all in one. Let's see how it plays out as we experience 2010. I take this opportunity to wish everyone every success in this new 2010. Good luck to all, Phil. Booker, Booker Realty, 717 Woodstock Rd., Fredericton, N. B. e3b-5n8.
