News of probable recession in the U.S. economy is driving international markets into a tailspin. Today, the Dow Jones is down significantly as are its European and Asian counterparts. The U.S. dollar is taking a beating in foreign exchanges, off by at least 40% against the Euro for example. Domestic new construction starts are at near historical lows and the housing market seems to continue its persistent downward spiral. Take all this in one gulp and it is easy to swallow a bitter pill. But, is it really as bad as the nation’s media and pundits would have us believe?
Whether home seller or buyer, with a little more deliberation, investigation and consideration, you may find reason for optimism amidst the gloom. Consider this:
· Despite the sub-prime lending debacle, interest rates on conventional loans remain low
· Stalled or falling housing prices present opportunities for first time home buyers which were only dream twelve months ago
· Inventory is up presenting buyers with more options
· Sellers who intend to buy up may see longer market times on their houses for sale, but on purchases they enjoy the same beneficial market dynamics as other buyers
· With border-line buyers either falling by the wayside or taking necessary steps to improve their credit standings, buyers in today’s market may be less risky
· Sellers are doing more to prepare homes for the market including pre-inspections, buyer incentives, clearer disclosure
· There are fewer multiple offer situations, thus buyers have to compete less
· Builders are offering unheard of incentives
For real estate professionals who remain in the industry for the long run, the picture may be equally optimistic:
· With agents leaving the industry in droves, there is less competition
· A better qualified buyer begets a cleaner, less complicated transaction with fewer surprises
· Sellers needing experienced, successful professionals to market their homes are less inclined to negotiate commission rates
· The better qualified mortgage brokers remain in the business as the opportunists are squeezed out
Real estate is directly market-driven, thus cyclical. For those making a long term investment as either an industry professional or consumer, the prognosis in my view remains positive.