Home sellers and their listing agents may be experiencing this very thought. Where are all the home buyers? We had a rise in sales, but now it’s slowing down as the summer winds down (and is almost over). Perhaps many are still away on vacation, or packing their kids off to college?
Sure, who doesn’t want to put off the tedious and dreadful house-hunting of a ‘project’ and enjoy what’s left of the summer. The buyers that needed to buy a home to get their kid(s) into school for the new school year – have either done so already, or are just about to, or have changed their minds and will just wait another year to buy. That buyer’s pool is pretty much done. Before you know it, we’ll be in the fall months and time to get back in the groove with the lazy days of summer behind us for another year.
Could it be that a lot of the buyers are just still on hold, waiting for prices to drop even more because of this crazy economy? Banks are getting a lot tougher with their mortgage criteria, too, so should nervous buyers bother? There’s a lot of scary and negative news out there. Consumer confidence - zip!
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The world economy is in turmoil – job security and the ‘benefits’ that once went with it are in jeopardy. The stock market is volatile, and no one in their right mind wants to pay more for a home. Then if you did find a home you want, agree on a price, and then have it come in under appraised – nightmare!
It sure makes sense to wait for the economy to bounce back, but wait for how long? Are buyers willing to wait for ‘whenever’ and put their lives on hold to save some money and compromise their sanity? Are buyers a part of the problem by holding off and waiting for the next guy to step up? Well, you can’t take a blind eye and not be concerned, so what’s the answer?
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Let’s look at the big picture…down the road is real estate still considered the best overall investment according to all the experts? Yes! The rates are still low and as history has proved before, there will always be ups and downs in any type of market, yet real estate is still considered the best investment. http://www.housingviews.com/.
So, do we want the economy to bounce back and feel that consumer confidence flowing again? I would definitely hope so.
With so many questioning what people’s desire for home-ownership are, we should remember:
- 81% of adults still believe that home-ownership is the best long term investment available;
- 82% of homeowners who have seen their house lose value still believe that home-ownership is the best long term investment available and
- 81% of renters hope to be home owners in the future.
Families are trying to determine whether or not now is the time to buy a home. Some may be getting advice to sit out the current real estate market and rent instead for the next year or two.
Not that I agree with this advice, but everyone’s financial situation is different. Home-ownership still remains to mean a lot to a family. It comes down to realizing that the financial aspects of purchasing a home is the biggest concern in this challenging market today and will it appraise at same said cost. You need to make your own decisions by being informed and listening to your own heart. Be a “sponge” and base your decision on your own terms involving your job, family, the school, and location desired, etc.
If you’re renting and want to stay in a rental, consider this:
According to Citigroup:
“When we examine the relationships between mortgage payments and income and mortgage payments and rent, we see that these relationships have also reverted back to or below equilibrium points. In some cases, particularly when mortgage payments are compared to the cost of renting, home prices actually appear cheap.”
“JPMorgan analysts said ‘the continuation of falling rental vacancies and rising rental demand will make home buying increasingly attractive’, especially as rental prices increase.”
Business School professors Eli Beracha and Ken H. Johnson
“Fundamental drivers now appear to be in place that favors home-ownership over renting in the near term future…
The second finding might seem unwise to many given the recent crash in the real estate markets around the country. However, rent-to-price ratios now seem to be in place along with other fundamental drivers that favor ownership over renting…
Conditions (historically low mortgage rates and relatively low rent-to-price ratios) now seem in place to favor future purchases.”
Footnote: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, (strong economic news normally has the opposite result). Bonds and Home loan rates improved last week but tapered off a bit on Friday. Stock markets fell once again last week on fears of a double-dip recession. However, home loan rates are still at some of the most attractive levels ever seen - making now still a great time to consider a refinance or home purchase.
Any thoughts, questions or comments?
