The time to buy a home is near.
There are several things that I look at in terms of timing the real estate market. One is the local economy. We could talk about Microsoft, Boeing, and Starbucks. Another talking point is the global economy. You may have noticed the stock market is concerned about Greece’s ability to pay it’s debts. Lastly we could talk about the expiration of the tax credit for first time home buyers, the Fed no longer buying Mortgage Backed Securities, and the end of the Census hiring period.
All things considered there is one truth about buying Real Estate: Bad News, is Good News. Once people start talking about how bad the real estate market is, that’s the time to buy. We are headed into a period where all the bad news will come together. It could have happened last year, but the current administration chose to prolong the viability of the financial markets.
To be very clear, this had nothing to do with property, in particular housing units. This was more to do with high paying financial sector jobs that could unwind some of the complexities in the derivative markets. It seems unlikely that we will be regulating speculative investment any time soon, but it the mortgages will be less, and less, desirable as an instrument.
Putting people out of their homes looks bad politically, and it was something banks were unprepared for. In my opinion, banks thought they would bully through a few years of collecting mortgage payments, and consumer debt could cover any losses they may take.
Instead we have millions of foreclosed homes waiting in the wings with millions more properties behind on the payments. Unemployment is up, and home prices are falling. All of these things are good for making reasonable offers on your next home purchase.
In the next few weeks we are going to explore when to begin looking and what to be looking for. As always if you have questions you can e-mail me from this site or call.