This year has started off with some slightly good news on job growth, retail spending and a rally in the stock market, so does this mean the recovery is finally taking hold? According to Jamie Dimon, the CEO of JP Morgan Chase, he sees a growing economy for 2012.
He says that corporations are in outstanding financial shape because they are earning money, have plenty of capital and good margins. In terms of loan growth in the business sector, small business loans are up 70% and middle market loans are up 18%.
In terms of housing, he feels we are at the bottom and may be there a while. Supply and demand are rapidly coming in balance. Renting is becoming more expensive in some cases than buying. In terms of our local market in Southern Washington, the data is in line with this. We have a 6 month inventory across the board with a 11% drop in value comparing 2010. In addition, listings are down 11% as a whole, so there is a very noticeable drop in inventory.
In terms of interest rates, Jamie feels that the rates are going to go up this year. He feels the faster things improve, the sooner you get higher rates. So the first part of higher rates is a good thing, if it was accompanied by growth and not high inflation. He says that once you see employment starting to grow by 300,000-500,000 per month, housing prices will increase along with interest rates.
On the local level, in the last three months I personally have seen a big increase in the number of serious home buyers and investors. The homes under $130,000 are going very quickly and there are less available, so if you are in this category I suggest you purchase now. Even in the $200,000-$300,000 the inventory is slim, which probably will change with-in the next couple of months as sellers start putting their homes on the market. This is the first time in the last 4 years, where sellers are in a better position to sell their home. If you have questions about the market just send me an email or go to www.clarkcountyhomeguide.com and I would be happy to send you a market analysis!