Monday, March 31, 2008
Economics? But isn't that boring?
I know, Economics ARE boring-however, whether you're dealing with Buyers or Sellers (or if you are an IDIOT who is RENTING), you need to read this. As a closing attorney, I am a cheerleader for the real estate biz--chances are, if you're reading this, so are you! We all have a vested interest in things turning around. With that being said, you COULD choose not to believe what I'm going to say (remember-as a real estate pro people will think YOUR opinion is 'suspect' as well). Why? We say/WANT the market to do well but here are the FACTS: home sales are UP & sales prices are DOWN. Guess what? This trend WILL continue. Stats? Check out S&P Case-Shiller indices, the Wall Street Journal, Business Week, the NAR/NAHB & more. See the USA Today story linked HERE for more info (though a recent report wasn't as rosy for NEW homes). Why are prices still falling? INVENTORY. Yep, that evil "supply & demand"-you can't escape Economics! Too many homes = price drop. If you want to sell today, you may need to drop your price. If you have buyers sitting on the fence waiting for that price drop, there's another negative fact-rates are going to go UP. We are at historic lows right now; we're still around 6%. A $250K loan at 5.75%=$1198. IF you waited for a drop to $230K but rates go to 6.5%, suddenly you'll pay $1246. Is it really worth waiting? Another factoid for nervous nellies-stocks lost more $ in the last few months than housing did in the last year! Housing WILL rally-buy NOW!