Among numerous predictions made, the visiting presenter said local real estate agents were going to face many obstacles in the coming year. But sales could be made if the price was right.
“The recovery in every recession since 1949 has been led by a recovery in the housing market,” Jones said, adding that, so far, no real estate recovery is in sight. “It's going to be a tough year, isn't it?”
Most attendees nodded when Jones asked them if they agreed with his assessment.
Unemployment and home sales
Jones said jobs are everything when it comes to home sales, and with unemployment rates high nationally and state-wide, a real estate recovery will be difficult.
When the U.S. does well, Colorado does really well, he said. When the U.S. does badly, Colorado does “really bad because no one comes and everyone leaves.”
“We just lost nine years of job growth in a year,” Jones said.
According to Jones, Summit County lost 911 jobs net in the last year, with a current unemployment rate is 6.8 percent. Though Summit County took a hard hit due to ceased construction, Jones explained the relatively low unemployment rate by saying people without a job usually can't afford to stay. (Colorado's unemployment rate is 7.3 percent; for the U.S. it's currently 9.7 percent.)
The second-home market has suffered as well, with Jones saying those who can afford to buy them are looking in other places.
“The rich go to the best location because they can better afford real estate,” Jones said
The Vail Valley is a perfect example of this — jobs haven't take as hard a hit because Vail is still the bigger destination, Jones noted. The area has seen a loss of 687 jobs lost over the past 12 months and a 6.6 percent unemployment rate. He also said there was better employee housing in the Vail Valley, so people can afford to stay longer if they become unemployed.
2010 predictions
Though Jones said it's unlikely an increased national tax credit for home buyers will occur, he told presentation attendees that it would be a great way to motivate the reeling real estate market. “They ought to have a $20,000 home buyer credit, and you can't sell for five years,” he said.
Another idea he floated is allowing every home owner to refinance loans at 5 percent. Jones said the current stimulus plan doesn't seem to be stimulating. He predicted even another stimulus plan in 2010 to actually create new jobs, putting the country even deeper in debt. The current national deficit is $1.8 trillion.
Part of Jones' tough 2010 forecast also included interest rates going up once the job market rebounds. Yet, a highlight for 2010 is “it's the cheapest time to buy in decades.”
Other good news for Summit County — home values in the community have held up. The market has only sustained a 10-15 percent drop. In many cases, this is less than other areas of the country.
