When I talk about real estate with my clients, friends, family and even my fellow Realtors, I hear the usual stories of buyers holding off due to fears of the slow economy or they are waiting for that perfect â€œscreaming buyâ€ to come along before purchasing. I also often hear about sellers not listing their homes because they wouldnâ€™t get as much in this challenging market as their neighbors did a few years ago. I, however, choose to look at the market in an entirely different way â€“ one focused on opportunities.
After my clients wring their hands about the nationâ€™s high unemployment rate, the fragile economic recovery, and other economic stories they had seen on CNBC or read in this morningâ€™s paper, I reply with a simple question: â€œOk, but how is your personal economy doing?â€ After a puzzling look, I explain that while the nationâ€™s economy is important, itâ€™s not nearly as relevant to them as their own personal circumstances when it comes to buying or selling a home.
In many cases, my buyers have secure jobs with good incomes and strong savings and investments. With home prices easing and mortgage rates near record lows, they were personally in a good position to afford the home of their dreams â€“ perhaps in a better position than they will be in the future when interest rates rise and home prices rebound. Conversely, many of my sellers have a great deal of equity in the home that they had owned for years and would walk away with a good profit. I remind them why they wanted to sell in the first place â€“ to move up to a larger home, or maybe downsize in retirement, or perhaps relocate to be closer to their grandkids.
This story should remind all of us that itâ€™s important for consumers to weigh their own â€œpersonal economyâ€ against the nationâ€™s economy when deciding whether to purchase or sell a home. Itâ€™s easy to get caught up in the daily drumbeat of economic news. You canâ€™t turn on the TV or the radio, or read a paper without the latest economic minutia. While most experts agree that the U.S. economy is recovering and the risk of a â€œdouble-dip recessionâ€ appears over, some days it still feels like weâ€™re taking two steps forward and one back.
But we canâ€™t lose sight that what really matters in our investment decision isnâ€™t the latest jobless figures or manufacturing orders or even the Case-Shiller index, itâ€™s our own personal circumstances. Assuming your â€œpersonal economyâ€ is reasonably good, it may be time to swallow your fears and take advantage of this window of opportunity to buy a home.
Iâ€™m reminded of the old saying that you make your profit on real estate when you buy, not when you sell. Itâ€™s a lot like the â€œbuy low, sell highâ€ philosophy of investing in stocks. While no one questions that there are economic challenges out there in the market, there are also tremendous opportunities. By the time all of those macro economic concerns have been lifted â€“ when the â€œall clearâ€ bell rings again â€“ itâ€™s doubtful the same opportunities will be around in terms of prices and mortgage rates. Your â€œpersonal economyâ€ may just be the best indicator you have when considering whether to make a real estate move now rather than later.
If you are ready to make an informed decision about your real estate future, please contact me directly. I am happy to help you in any way I can.
Charo Bhatt, Broker Associate