RE/MAX co-founder speaks on real estate market conditions

Dave Liniger, the co-founder and chairman of the board of RE/MAX International, Inc. delivered some good news at his Chicago press conference yesterday: He thinks that although we're still going to see foreclosures for the next few years, the market has bottomed out.

Some points Dave made through his speech and the accompanying literature:

1. In July, there was a year-to-year increase in the number of homes sold in a month for the first time since 2006 in the Chicago area (7,752 homes sold in July '08 vs. 7,787 homes sold in July '09). Median price increased month over month from $205,000 in June to $209,000 in July. And average days on the market decreased slightly month over month from 172 in June to 171 in July.

2. The top end of the market has viturally disappeared because borrowers are unable to get jumbo loans. The average home price has dropped 40 to 45 percent, but only 30 to 35 percent per square foot- so the highest end homes are dropping value the fastest.

3. The rate homes sell at, Dave says, seems to be a combination of interest rate and psychology. With interest rates doing well, it's just getting people into the mindset of buying homes again. And in some cases, getting people confidence in their jobs so they feel comfortable buyign a home.

4. Real estate transactions are picking up. Dave expects a slow and steady improvement over the next 18-24 months.

5. Today's buyers are buying to hold- no one is expecting to flip a house for an increase in value any time soon. But bargain hunters and investors are still out in the market

6.Generational changes will soon have an impact on the homebuying market, Dave says. Statistics show that 40 percent of men ages 20-40 still live at home, but Baby Boomers are starting to downsize, and will eventually move in with their children or to a retirement community, leaving several of their large homes behind for Generations X and Y. Gen Xers tend to wait on buying homes, while Gen Y is buying earlier, Dave said.

7. More of the 1.1 million immigrants that enter America legally are buying homes within their first year here. This may cause an increase in multi-generational homes, which are a more common generation in other countries, Dave says.

So, the face of homeownership may soon be changing, but at least we're heading in the right direction and will be back on track by 2011.