Monday, August 23, 2010

ONLY A CRAZY PERSON WOULD BUY IN THIS MARKET!


WOW - it must have been summer, because time certainly got away from this amateur blogger!

That being said, what is going on in the real estate market now?? Everyday a person picks up a paper, listens to a news report or surfs the internet and finds nothing but confusion. Let me just say, it's not as confusing as it might seem. Most of the stories you hear or read carry little or no context, and certainly don't come from a local perspective.

Here's an example from just the past couple of months. Beginning in April 2010, reports were that sales were up. May, sales were up and, suprise, June sales were really up. Well no duh - it was the rush to close sales for the First Time Home Buyer Credit. Now, reports are that sales are down. Again I say, "Duh." First Time Home Buyer Credit is over!

So what should a buyer do? The burning question on everyone's mind is, "Should I buy now?" And let me respond ever so clearly, "YES!"

Well that sounds just crazy, doesn't it? And I have to be honest. I was having a hard time knowing whether to advise buyers to buy now or wait. That was, until I heard from an economist, that this is exactly the time you should be buying. Sound Crazy? Read further.

Only about once every generation (about every 35 years) does the gas literally go out of real estate values. Now I'm not talking a little 6 month downturn. I'm talking about an all out crash. In my most recent memory, this type of event has occurred during the Great Depression, In the late 70's/early 80's (remember 18% interest only - I do), and then now.

That gas going out is when your Aunt Tilly bought her home in San Diego for $9,000 and can now sell it for $350,000. That gas going out is when my Honey and I bought our first house in 1982 for $40,000 and it's now worth $200,000.

So what do you think this gas-out will bring? Combine these prices with a 4.5% interest rate and you've hit the jackpot baby!

But there's one little catch and this is where great Realtor's can help you with your buying decisions. That catch is the same one I've talked about before - changing your paradigm about what your house is. This home is a place for peaceful enjoyment, privacy and a place to build memories...for a VERY long time (read 15 - 20 years). It is no longer your ATM or the family's 3rd income earner. Contentment needs to reign supreme in your home.

Hope that helps. And now lets bring on the Fall!

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