I spent yesterday talking with a few media outlets including CNBC’s Squawk Box, ABCNews.com, Yahoo Tech Ticker, Reuters, Smart Money, Money and Forbes about housing and our Buyer Bonus Sales Event.
When I sat down to speak with Aaron Task at Yahoo Tech Ticker I shared with him why today’s interest rates, inventory in many parts of the country and home affordability across many markets make now the best time to buy a home.
More than 150 people commented on that interview and I read what everyone had to say. Most disagreed with me. I understand why. It has been a very tough few years for most Americans considering the financial challenges we have endured. The recession, job losses, foreclosures, falling home prices, individual debt and so much more have made these last few years one of the toughest economic times in our nation’s history. It’s understandable why many people are still feeling stress and uncertainty.
Some of the comments were pretty tough:
“Strong buyer’s market? He’s killing me with his humor… he should do stand up in Vegas.. that was really funny…”
“Face it, folks, if we need record-low interest rates and a $8,000 incentive to keep the market alive, it is a HORRIBLE time to buy. If it was a great time to buy, we wouldn’t have to prop up the market. Why would anyone listen to a Coldwell Banker person anyway? RE people always say ‘now is the best time to buy’! What a clown.”
“Any idiot can sell real estate. Realtors didn’t see the collapse coming, but yet they hype the recovery every year. What this hipster really needs, is an Atomic Wedgie.”
Wow! Criticism is one thing, but a wedgie is another.
When I do these TV or video interviews I don’t normally get time to go in depth into each point. So yesterday I didn’t properly explain that homeownership is not for everyone. For example, those who may have lost their job or fear losing one, those who may not stay in their home for at least a few years and unfortunately those who don’t have the equity in their homes to afford to move.
I am not advocating that everyone can or should be buying a home right now. Purchasing a home is a serious commitment and investment that is a deeply personal decision.
But understand that last year more than five million homes were sold and the National Association of Realtors and others are calling for at least that amount in 2010. Those who are interested in homeownership, those with good credit, those with stable jobs and those with savings and income to support homeownership should speak to their local real estate professional about the opportunity they have today.
But everyone needs to do their homework. Here is what you need to spend time looking at:
- Home prices in your market – While so many are obviously hoping to buy at the lowest possible level, there is no way to know what the future holds. In most markets around the nation, prices have stabilized and in some even rising. But real estate has gone back to being an ultra-local market and you need to spend time with an agent learning what is happening where you want to live.
- Amount of homes on the market –From a national perspective, the National Association of Realtors just reported that there are 3.89 million homes for sale. This is down nearly 15 percent from the high in July 2008. This still equates to a buyer’s market in most locations. But each community is different.
- Tax advantages to homeownership – After you utilize a rent vs. buy calculator to determine if buying is smart for you, talk to your financial advisor about the tax advantages you would enjoy. Determine if these incentives work for you.
- Interest rates – There is no denying that mortgage interest rates are near an all-time low.
I have spent more than three decades in this business because I believe in the American Dream of home ownership. In spite of the challenging economy, I stand by my words that a home is one of the smartest long term investments that a person can make. I look forward to hearing from you.
Now is an excellent time on Maui to buy for those who have stable income, a down payment, and the American Dream of owning their own home. When you look back to 2010 in 10 years from now you will wish you jumped into the Maui real estate market, especially if that has been your dream.
Naysayers will always negate the real estate market but investors are willing to invest and they reap rewards.
Good words to explain how market conditions relate to a specific buyer. That's is exactly what you have to tell them if you want to have a long term relation with skitish buyers now days. The truth builds trust.
Jim – I think it’s great that you are addressing some of the understandable criticism, or perhaps cynicism, that your interview garnered. For years NAR in particular has been guilty of irrational, some would say irresponsible salesmanship and that has undoubtedly led many to tune out messages of promise.
However you hit the nail on the head when you say “…homeownership is not for everyone.” Many people don’t want to hear that message, (and perhaps NAR didn’t want to convey it) but is absolutely true. All too often over the past several years people have been quick to blame banks, government, Realtors – anyone & everyone but themselves.
But today IS a great time to buy in many markets around the country. Unbelievably low interest rates, lots of properties to choose from and stable prices make for an excellent environment for many people, but certainly not all people. While you’re obviously vested in the real estate market by virtue of your day job, I think your advice is spot-on – “Those who are interested in homeownership, those with good credit, those with stable jobs and those with savings and income to support homeownership should speak to their local real estate professional about the opportunity they have today.”
If enough people take that advice, look closely at their own situation before jumping in, and partner with the right professionals I believe we’ll be back on track to the modest yet sustainable long-term growth that most of us crave.
I strongly believe that the amount of newly affordable homes in my local area makes it an undeniably good time to buy IF and only IF you hare the desire and ability to live in your new home for no less than the next 6 years.
To find homes for sale in my community under $250,000 is something that is simply amazing to many.
For a very long time the average sales price was well into the $500K range.
It is clear that we are in a cycle of property value that will rise and fall like the tides. Homeownership is still the American dream as it should be. The key is responsible buying.
Before anyone says I make a living from people buying homes and of course I’m going to say it’s a good time to buy please keep in mind I also counsel people to wait when the situation isn’t ideal. That may mean wait to sell or wait to buy or both.
Lisa Johnson Sevajian
I think Lisa Johnson Sevajian said it well, “the key is responsible buying”. Even on the Today show Jean Czatzky says it a good time to buy IF you have good credit and funds for a downpayment. Indeed homeownership is not for everyone, that holds true in any market. It’s good to see you can take the criticism and still have the integrity to stand by your words.
For over 50 years the home ownership rate was below 63%. Then, with the availability of no money down loans tenants became homeowners and the rate of ownership topped at 70%. We are in the middle of the transition back to the low 60% range which is sustainable. America has to live someplace and when the job markets stabilize those that have doubled up due to the economy will form their own households again. Whether buyers or renters, people want a home to live in. Someone will own the homes, even it is the banks.