There are five sectors that make up the national and the local real estate markets. Those five sectors are Industrial, Residential, Retail, Commercial and Investments which all overlap each other. Now it’s time to have a look at the real estate trends for 2007.

It’s important to realize that the national trends and local trends can differ dramatically depending on the economic influence such as interest rates. Right now the market is healthy and is going to continue to become even healthier throughout the year. Let’s have a look at each of the sectors.

Residential: What ever you’ve heard about the market slumping its dead wrong. There has been no real downslide in the price of housing. The residential market is going strong and if there is a bubble it sure hasn’t been deflated yet.

The strength of the market for residential housing is directly affected by the interest rates. If the interest rates climb the housing sales slump. The market also depends on unemployment rates. The lower the unemployment the higher house sales.

The housing market will decline as interest rates climb. The market also depends on unemployment rates. The lower the unemployment the higher house sales.

A market will also slump because of too many houses on the market. This will correct itself as people remove their homes from the market due to slumping prices which then brings the prices back up.

With unemployment and interest rates at an all time low the housing boom is going to continue through 2007 and most likely into 2008 so if you are in the market for a house don’t be waiting for lower prices. If you don’t get in now you may not be able to in just a few months.

Retail: Changing youth demographics and tends of leverage buyouts will both be factors in this sector. Private capital tends to consolidate across a single industry which results in a particular sector being very healthy. The demographic trend continues to be urbanized young households that are made up of two adults, no children, and at least one pet. As this market continues to demand more in the retail sector retail will continue to see a healthy 2007 just like 2006.

Industrial: This sector is motivated into moving sector of its company offshore to remain competitive. The higher wage demands and operating costs have resulted in these companies seeking alternatives. 2007 sees the industrial sector begin to stabilize as it finds is comfort zone from all the turmoil of 2006.

Commercial: This sector consists mostly of office buildings which have seen significant growth in the past few years. The trend for 2007 will be for increased urban growth but at a very steady pace.

Investment: The real estate investment market should follow the same path as the residential market because as long as interest rates are down investment in retail properties is a smart move. With the quickly increasing values you can buy, rent, and make a good return on your money within just a few years if you decide to sell.

There is no question that the real estate trends for 2007 are going to still see significant demand with housing prices continuing to rise. The game will be to beat the clock and buy in before prices take another significant jump upwards.

As we head into the first month of spring, there is no doubt — real estate activity has increased significantly in many parts of the country. This leaves many to wonder: is this the beginning of the end of the real estate market downturn? The spring market is looming — the big question is, what type of market will it be? 2006 is no longer new news for anyone. We hit a market downturn — after 5 years of hot growth, it was bound to happen. But more important is how long will the downturn last? This factor is vital for anyone thinking of putting their home up for sale in 2007.

This fall, we saw prices drop in many places around the country off of strong values in 2005. This isn’t a fact that homeowners are thrilled about. But it also has to be tempered by the exceptionally strong housing market of the previous 4 or 5 years. In many parts of the country, the depreciation of 2006 only erased a small portion of the equity that had been building.

The market didn’t just affect pre-existing home sales. Builders faced similar difficulties in 2006. Many responded by slashing prices and offering increased incentives to entice buyers. In several cases, builders even chose to cancel planned developments to wait out the market downturn.

This fall, there were two trends that were apparent: 1. homes had to be priced competitively and in top condition to sell and 2. buyers tended to be very choosy and spent time shopping around. This second trend contributed to the longer-than-usual market times of many homes. It wasn’t unusual for well-priced homes to be on the market a long time before selling.

There were several main factors that contributed to the market conditions we all experienced in 2006. Many experts feel that the Federal Reserve (Fed) was too aggressive with interest rate hikes. Often, changes in the interest rates take a while to reverberate throughout the economy. Instead of letting the market react to small interest rate changes, the Fed pursued an aggressive series of hikes.

Also, people are discovering that the media itself was largely responsible for a good deal of buyer uncertainty in 2006. For years, every “pundit” out there had been predicting a market crash and for the past 5 years or so, the market held strong. Then, the Fed started raising the rates and things started to cool. Of course, everyone with a microphone started piling on the idea of a “market bubble”. Unfortunately what happened was “Chicken Little Syndrome” — suddenly everyone thought the sky was falling and the market began its downturn – all while interest rates stayed reasonable and housing prices good.

The result was 2006. The next question is obvious: what’s next? Here’s where we have some good news. The general feeling among the true real estate experts — the REALTORS who are out in the field in your local market day after day working — is that 2007 will be the end of the downturn for many areas of the country. We are already seeing signs of this all over the United States. Here in the Midwest — particularly the Fox Valley area west of Chicago, things have already started to pick up — phones are ringing, buyers are buying and sellers have a very optimistic attitude about the next few months. In fact, many REALTORS are predicting a hotter-than-normal spring in 2007 that should end the downturn, signal a soft landing and return us to balanced growth in our local real estate market.

The biggest factor that should influence the spring market is the current pause (or end) in interest rate hikes. If the Fed holds steady to this policy going into spring, buyers should take it as a sign that the market is leveling out. Combine this with the fact that many buyers most likely held out towards the end of 2006 and we’re looking at a larger-than-normal pool of buyers that should commit to a purchase this spring. Also, consider the fact that we are still sitting on a large inventory of unsold homes, some of which are priced very attractively. Basically we have a convergence of a large pool of eager buyers and a large pool of unsold homes at great prices — the outcome should be a lot of activity this spring. So, how should all of this affect buyers, sellers and homeowners?

If you are a homeowner, 2007 should return us to a steady rate of appreciation. It probably won’t be as great as from 2002-2005, but we should return to a fairly modest, yet sustainable rate of appreciation. Sellers should be particularly interested in a rebound this spring. What was a very difficult and trying 2006 market should turn into a much better time to put a home up for sale. The most important thing for sellers to understand is that the inventory of unsold homes should still be high this spring-but buyers should be buying. This points to several factors: sellers need to make sure their homes stand out of the crowd-both in condition and price. If this is done correctly and your REALTOR works hard at marketing your home, its time on market should be greatly reduced from 2006 levels.

Buyers should see the rebound as a last call of sorts. If you’ve held off buying-for whatever reason, it’s time to commit to a purchase. In fact, buyers should really consider making a purchase in the next month or two in order to gain full advantage of the 2006 market conditions before they level out. Those that wait until summer or fall might miss the current buyer’s market and find more competition and higher prices. Another benefit to buying in the short term is that interest rates are still relatively low and there are some great programs out there for buyers. While we all expect the Fed to hold steady with rates, we don’t expect them to drop anytime soon. So the current rates might represent the lowest they’ll be for the foreseeable future.

2006 will go into the books as one of the most difficult years for real estate in the past decade. Looking forward to 2007, we can expect the market to level out to a sustainable pace. Whatever your real estate plans are in the coming year, it will be important to keep track of current market conditions. If buying or selling is in your near future, it’s important that you seek professional assistance to help you make the decisions that will benefit you the most.

Stockton, California reported the highest foreclosure rate among the nation’s 100 largest metro areas from Jan to Jun 2007, according to RealtyTrac, an online marketplace for foreclosure sales. Detroit and Las Vegas documented the next highest foreclosure rates. RealtyTrac’s 2007 Midyear Metropolitan Foreclosure Market Report showed the foreclosure activity in the top 100 metro areas for the first half of 2007. As foreclosure rates continue to rise, 82 out of 100 metro areas recorded year-over-year increases in foreclosures.

Stockton reported one foreclosure filing for every 27 households with a total of 8,169 foreclosure fillings on 4,239 properties. The rate of foreclosure has increased exponentially to three times more than the number reported last year, for the same period.

Detroit, with one in 29 households going for foreclosure, recorded the second highest foreclosure rate. A total of 28,705 foreclosure filings were made on 20,231 properties, which is almost double the number reported from Jan-June 2006.

Las Vegas documented one foreclosure filing for every 31 households, making it the third highest in foreclosure activity among the 100 metro areas. It reported 22,928 foreclosure filings on 13,028 properties, double the number reported during the first half of 2006.

Six of the top 20 metro areas with the highest foreclosure rates were in California and four in Ohio.

The following are the top 20 U.S. housing foreclosure markets from Jan to Jun 2007, the total number of foreclosure filings and households per foreclosure filing.

1. Stockton, California: 8,169 foreclosure filings; one foreclosure filing for every 27 households.
2. Detroit/Livonia/Dearborn, Michigan: 28,705 foreclosure filings; one filing per 29 households.
3. Las Vegas/Paradise, Nevada: 22,928 foreclosure filings; one filing per 31 households.
4. Riverside/San Bernardino, California: 41,351 foreclosure filings; one filing per 33 households.
5. Sacramento, California: 20,516 foreclosure filings; one filing per 36 households.
6. Denver/Aurora, Colorado: 23,842 foreclosure filings; one filing per 42 households.
7. Miami, Florida: 20,275 foreclosure filings; one filing per 46 households.
8. Bakersfield, California: 5,365 foreclosure filings; one filing per 47 households.
9. Memphis, Tennessee: 10,800 foreclosure filings; one filing per 49 households.
10. Cleveland/Lorain/Elyria/Mentor, Ohio: 8,844 foreclosure filings; one filing per 50 households.
11. Fort Lauderdale, Florida: 15,720 foreclosure filings; one filing per 50 households.
12. Atlanta/Sandy Springs/Marietta, Georgia: 36,502 foreclosure filings; one filing per 54 households.
13. Fort Worth/Arlington, Texas: 13,221 foreclosure filings; one filing per 57 households.
14. Fresno, California: 4,867 foreclosure filings; one filing per 60 households.
15. Indianapolis, Indiana: 11,677 foreclosure filings; one filing per 62 households.
16. Dayton, Ohio: 5,966 foreclosure filings; one filing per 63 households.
17. Dallas, Texas: 23,284 foreclosure filings; one filing per 65 households.
18. Akron, Ohio: 4,378 foreclosure filings; one filing per 70 households.
19. Oakland, California: 13,482 foreclosure filings; one filing per 70 households.
20. Columbus, Ohio: 10,706 foreclosure filings; one filing per 70 households.