We’ve all heard and seen all the bad, horrible things the media has been portraying about the real estate market, “we’re going to sink into another Great Depression”, “the real estate bubble has finally burst.” Threes no doubt that times are tough. We are in a recession and if you are unfamiliar with what a recession is, it’s defined as being two successive quarters of negative growth. However, you must keep in mind that we will come out of it and better days are ahead!
I have just become frustrated with all of the negativity that the media keeps spuing all over the place. They seem to like to pick and choose what they report on leaving out some very positive facts, important, hopeful facts that I think you need to know about, the silver lining.
When you want to apply for a mortgage, certain factors are taken into consideration such as the Housing Affordability Index. The Housing Affordability Index measures the ability of a typical American family to qualify for a mortgage. A score of 100 means that a typical family would qualify for the preferred 20% down payment as well as the monthly payments of no more than 25% of their household income. The great news that the media doesn’t ever tell you is that currently, the index is at 135.2% which means the average American family not only can afford to purchase a home, but also will have excess money for living expenses.
More good news according to the National Association of Realtors and that the media forgets to report on is that existing home sales prices are also expected to increase by 3.7 percent in 2009, with new home sales increasing by 4 percent.
I was reading an article recently and after I was done reading this one tiny blurb, I thought about it and thought to myself how true it was so I wanted to share it with you. “Real estate is the only industry that gets “bummed out” when we have a sale- “oh, there are lots of options, prices are down..I’m depressed!” At Nordstrom, they’d be saying this is the time to get into the store.” Come on people how true is that? When department stores SLASH their prices we all go crashing through the doors to be the first one in line to buy, buy, buy and save, save, save. Same holds true for real estate. We just have to start thinking of real estate the same way we think about department stores. The only difference is that you won’t see huge signs hanging up saying ” CLEARANCE SALE!” You won’t see commercials on television telling you to come by a house this Monday and save up to 50% off. So, I am telling you. If you are looking for a home, now is your time. The real estate market is having a sale. A huge sale. Interests rates are at an all-time low, the market is saturated with inventory and prices have been SLASHED!
Home owners who are out there screaming to anyone who will listen “it’s not a good time to put your home up for sale” couldn’t be more wrong. I want to be very clear here. Sure, those days of home owners putting their unimproved, out dated, not maintained home up for sale and getting $100k over what they should have ever gotten are OVER! Gone, goodbye! Goodbye and good riddance I say! I don’t know about you but I wouldn’t want to purchase a home where the home owner lived for the last 50 years and never made any improvements and now just because some other sucker paid one of their neighbors $100k over what their home was worth, this home owner wants me to pay it too. Today, that poor sucker who purchased that over priced home is living in a home that has now depreciated and isn’t worth what they paid for it and more than likely is facing foreclosure! Home prices are now going from completely ridiculous back to realistic and that is great news for everyone. If you are looking to put your home on the market, expect to get market value. If you are a home owner who thinks that your home is worth more than every other home around you my advice is to not put your home on the market.
More great news for you is that gone are those unethical mortgage consultants and Realtors. All of the people who jumped on the band wagon just to make a quick, dishonest buck from you are gone! When all of the dust has settled, the only mortgage consultants and Realtors who will be left standing are those who are in it for the long run, the honest, ethical, caring, respectable professionals. Mortgage companies have now made it more difficult to get loans which is a good thing. Remember how we got into this whole mess, in 1999, the U.S. government passed laws to increase home-ownership. Now, home-ownership is a good thing, but it’s not an entitlement. You’re supposed to work hard, save and even sacrifice to buy a home and over the past few years, that didn’t have to happen. Now, it does! Who said the American dream would be easy? So, settle down, buckle up and get ready for a bumpy ride. We enjoyed a nice, easy, relaxing ride for a long time.
I wrote this article to hopefully encourage you. I hope it does! There is always a silver lining!
Special thanks to Brian Buffini for his contribution to my blog!