1. An improving economy will create more buyer demand. The U.S. Economic Outlook projects a 2.2% increase in the GDP with individuals in California expecting to see a 3.5% gain in real disposable income.
2. A national energy policy to provide lower cost fuel which will further boost the economy and American companies’ ability to compete internationally. This should result in even more demand for housing.
3. FED credit regulations should ease, making it easier for qualified borrowers to obtain financing and in turn causing the pendulum to start to swing the other way. The government’s over reaction to lending standards has created a credit crunch. If lending standards ease to common sense levels, the market will react positively.
4. Many “baby boomers” are nearing the age of retirement and may be selling their current homes and looking at other options.
5. First time buyers, many of whom were on the sidelines the past few years, most likely will beat their historic average of being 40% of the market.