Friday, January 18, 2008
When Is The Real Estate Market Going To Come Back?
Not "When will the market rebound?" or "When will the market take an upturn?" But "When is the market going to come back?" It is as if there was a magical point when the market was where it should be, when it took an ugly turn and went to where it shouldn't be. It is as if they expect a magical day when it will go back to its original special point.Sadly, many people are waiting for this wonderful event to occur before they list their house for sale or before they will purchase one. Sadly, because such thinking is apt to cause them to miss opportunities when there is no need to do so.Commodity markets are constantly in a state of flux, with the commodities on which they report going up and down on a daily basis. It is very easy to observe in the various stock market indexes. We are reminded many times a day whether the Dow Jones and the NASDAQ are up or down and by how many points. The stock market can go up or down hundreds, even thousands of dollars in a given time period, yet people are buying and selling stocks every single day. No one waits for a previous low point to buy stocks, nor do they wait for some previous high point to sell. Except for professional investors, buying and selling decisions often have more to do with life situations than with money situations. If this year's tuition is due now, now may be the time to sell.Alas, many people fail to see the kinetic nature of the housing market. And since the housing market is more difficult to track, many people listen to the so-called pundits. Shouts of doom and gloom can boost TV ratings - we will tune in for assurance when we're scared. A better approach may be to define what it is that we want to know, then seek that information.When is the market coming back? Back to what? A better question might be "At what point would I be willing to sell/buy?" I have to ask it this way, because who is to say where the market went? Yes, the market did shift from a seller's market to a buyer's market in many parts of the country. But where and by how much should be your question. I have heard reports of highs and lows that varied so widely as to be confusing. The Miller Samuel reporting service said that the market was down 2.2 percent when compared with the previous year. At the same time Aubrey Cohen, another expert, was saying 6 percent. Bankrate.com advised to think location; some are up and some are down."Credit crisis" is a term we now hear every day. Problems in the mortgage-lending world do exist. But contrary to the belief of many, people are obtaining mortgages every day. MNS reports that "gasp, mortgage lenders are requiring down payments." What a novel idea! What will they think of next? And yes, the subprime market (i.e. loans to persons with bad or no credit) has all but disappeared. These facts do not mean that houses are not selling.You are probably right about now saying, "That's all well and good, but what about my house?" The accompanying data (see chart) compares the sales of three-bedroom homes in December 2006 with the same figure in December 2007. These numbers hardly reflect a market crash. They do not even represent a reason to refrain from buying or selling real estate at this time. "Not so bad" is the expression that comes to mind.When is the market coming back? No one knows, and anyone who says that they do is trying to sell you a bill of goods. We are talking about the future. And one thing that is certain about the future is that it is uncertain. History has proven that time and time again. Rather then fret about that magical point at which to see or buy real estate, look instead at what conditions exist at any given moment. In December and January, I have observed an increase in the number of people looking to buy and sell real estate.Why now? Who can say for certain? I have observed that the attitude of sellers is more realistic. They are no longer expecting a 60 percent per year return on their house. They do seem pleased when they learn that their house is still worth more than they thought it would be worth and that they have experienced in most cases, a substantial gain.Anyone thinking about buying should consider doing so now. I mean now. There is a large selection of houses available, interest rates are at an all time low, and buyer concessions are common. Oh, by the way, did I mention now is a great time to buy a home?