In almost every news market are gushing news stories, written by mostly young and inexperienced journalists, about what a wonderful time it is to buy real estate. Usually, since the writers do not have any time to produce their stories or to any research, they let some real estate professionals write them for them. How convenient. The story begins by pointing out that new first time home buyers are in a special situation of goodness since they have no "baggage" of the past to deal with. Translate. Real estate currently is quite illiquid, but since the writer sees this perfect present moment as the market bottom, by imagining the future as moving ever upward, things will be better.
There is no necessity to do extensive research---just ask members of your own family around the country how they are doing with trying to sell their property, or how they are doing looking for a job. In bear markets.....things go down. In other words, every day and every minute bargains are getting better. Rushing is not necessary. Patience is. Wait.
Here is a way to judge when the market is safe to enter. In our own news market, two news reporters are looking at homes and dreaming of buying. I propose that when the wages of these two young talented reporters have risen to the point where they qualify.....and where the prices of homes in the market have fallen to the point where they qualify, and where banks using traditional ratio analysis approve them---then the housing crisis will be over. OK. Not to put too much pressure on you, "G" and "S" but we are watching and waiting.
Click on the post for a sample article from the Daily Planet in Mpls.
Tuesday, July 01, 2008
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