Copy for Real Estate Guide Column for 10-28-05 (451 words)

REAL ESTATE PATTERNS
By Ken DuVall

A Cool Wind Bloweth

These are clearly tough and unsettling times: political turmoil, replete with scandals and free-for-all dogfights over spending and taxes; a sure deadlock over congressional budget cuts will push the deficit even higher; Iraq costs running over $6 billion a month; Katrina spending- plus Wilma now- equals many more billions; huge energy cost increases looming; immigration policies, or the lack thereof, with 10 million illegals in the U.S. so far; near-perfect counterfeit driver’s licenses, on and on. It’s a grim picture. Every element impacts property values in one way or another. As Elvis used to say, “I’m (we’re) all shook up.”
BUT WE’RE NOT BLOWN AWAY
Nonetheless, the housing market is still warm, even as unsold inventory approaches a 5 month supply, the highest in 5 years. Houses are taking longer to sell, particularly at the high end. Yet demand and momentum continue as experts anticipate record sales, for the 5th consecutive year, of over 7 million units. New escrows just set another record. Projected construction spending has topped $1 trillion, up 9%. Analysts see worker productivity rising 2.5% annually over the next decade, meaning the gross domestic product could go up 3.6% without fanning inflation, currently at 3.2%. Long term interest rates are still not expected to exceed 6.75% by year-end 2006. Read: stability.
MORE PRESSURE
Building costs will spiral due to supply shortages and increased material and labor costs. Try to get a contractor out to your house. They’re all booked up. Some won’t even call you back they’re so busy. Demand over the next decade will soar. China’s drain on raw materials is just the tip of the iceberg. India, Pakistan, Brazil, etc. will further strain all resources as urbanization gains pace in developing countries. Chico’s annual growth rate is 4.3%. Bottom line: figure on our existing home price appreciation and new home costs to continue upward. That’s the way to bet.
BIG TIME
Housing is one of the largest single sectors of the national economy, accounting for $2 trillion in transactions and providing millions of jobs and $100’s of billions in economic activity. It accounts for fully 22% of the entire U.S. gross domestic product. It’s not going away under any conceivable circumstances.

I’m pleased to say that public opinion of Realtors has reached an all-time high for the 3rd consecutive year. Public support for Realtors along with the value we bring to the real estate transaction is higher than ever. The beliefs about us that improved the most in this year’s survey included being the best qualified to promote the sale of a home, conducting business with professionalism, ethics, and integrity, and getting the job done! Yes!! Thank you very much everyone. It’s nice to be appreciated.

Ken owns Ken DuVall & Associates, Realtors at 3rd Ave. & Mangrove in Chico. Ken was the 2001 President of the Chico Assn. of Realtors and the 1995 Chico Realtor of the Year. See Chico MLS listings at www.KenDuVall.com and call Ken at 345-3700 for all your real estate needs. Free consulting.