If you are trying to buy a home in the United States, you no doubt have been startled by the significant lack of property on the market. It’s not a coincidence. You have also probably noticed how low interest rates are. It’s not a coincidence. Prices are also at, or near historic lows in comparison to earnings. This too, is not a coincidence. We’re in the middle of a real estate perfect storm. Statistics like July, 2012 Existing Home Sales just released today are signs of the times. Smart buyers & investors are seizing this unique time in history to invest in real estate, but what do they see that might help you?
First, let’s look at the current situation:
- The political climate has the politicians scrambling to support housing. They have been throwing everything at the wall to try and bolster the real estate market. Dropping interest rates, creating lending restructuring programs and even incentivizing buyers with tax breaks. To date, all attempts have fallen short of their intended goals.
- The Republicans and Democrats are as divided as they have ever been, so creating effective legislation to solve problems, including the real estate dilemma looks like an impossible dream.
- Some sellers are reluctant to sell because they think things might improve and their property might eventually increase in value. Those who can wait are sitting on the fence.
- Buyers who believe they know something others don’t are also waiting for what they think will be even better buying opportunities in the future. Many believe that after the election in November, chances of getting a “good deal” will improve, so they are waiting in hopes to catch the proverbial falling knife.
The truth is, the real estate stars have aligned to possibly create one of the best buying opportunities in history. After the election, a sense of certainty will return to the economy. Buyers and sellers will begin buying and selling more aggressively because of their regained sense of confidence in the future. As a result, prices will likely rise and interest rates will also increase. So buyers who waited will likely pay more for the property and pay more in loan costs.
Global events could certainly have an impact on the situation, but historically uncertainty has bred opportunity. The question now is how many buyers will take advantage of this possible once-in-a-lifetime opportunity?