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Paul Miller's Blog

By Paul Miller | Agent in Bradford, MA
  • Tough Market or Time To Jump In

    Posted Under: Market Conditions, Home Buying, Home Selling  |  January 16, 2012 12:41 PM  |  189 views  |  No comments

    This is a new time in Real Estate.  Many who have been in and those who have followed the business for a long time have never seen conditions like these we see in the current market.  The number of homes changing hands has plummeted over the past four or five years.  Home values in most markets have followed suit.  Distressed properties, ie: short sales and foreclosures represent an unusually large percentage of available homes.  This keeps values from gaining any traction.  Many sellers are avoiding the market entirely to avoid a distressed sale.  Many buyers sit on the sidelines due to the über tightening of the credit markets and the hope that values and interest rates will fall even lower. 

     

    Our financial system is so tied to the housing market that the above factors are all making it much harder for the economy to kick start itself back to more familiar levels.  An added consequence is that the price of rentals has skyrocketed due to new demand, meaning that prospective buyers will be able to put away less than before toward their goal of home ownership.  This will keep many on the sidelines for a longer period of time, keeping a vital segment of the housing market (first time homebuyers) less and less relevant.  Picture all the above factors in a type of hamster wheel spinning as fast as they can perpetuating each other in a cycle that is not only hard to break, but for many has become the new normal. 

     

    On paper it seems pretty dire.  Many buyers have given up; the dream of many sellers to make a profit on their largest investment is just a memory. 

     

    But this does not have to be the case.  The dream of home ownership is as valid today as it ever was.  Maybe the market as a whole has slowed down, but the individual desire to buy, own, and occupy a single home should not be swayed by the headlines.  Prospective homeowners may have to work a little harder and wait a little longer than before, but their dream realized will still give them the pride, stability, and financial advantage that it always has. 

     

    And although this doesn’t do a lot for the sellers in today’s world, buyers need to capitalize on extremely low list prices!  This either makes the home you wanted much more affordable to you, or provides you with a lot more home for the money.  When you compound this with the low interest rate environment, it seems like a slam-dunk!  I predict that in the years to come when home values rise again and interest rates creep up to levels not seen now for many years, buyers will regret not getting into the game, the way teenagers kick themselves for being frozen to the gym wall during a school dance. 

     

    The market as a whole is not yet ideal.  And it never will be.  Both buyers and sellers have to think of their needs independently of the market news and do the best that they can to improve their circumstances.  It is not a bad time to jump into the game.  As I usually recommend, talk to the people in your lives whose opinions you value, and seek the advice of Real Estate professionals who will work on your behalf.  Best of Luck!      

 
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