Hi Everyone!
I'm going to do my best not to get political during this blog. I will tell you that I"m not a big fan of the Media and I believe they are the largest contributing factor for our country going down the tubes. I believe the last two and a half years of the home price tumble was and is all media related. They have an agenda as they always do and the American people just line up and read their stuff whether it's true or not.
So how is the media fooling you? They are still telling you this is a bad time to buy. We have a customer last week who had wanted to do a short sale offer. It took months before we finally heard and during that time the Interest rates went from 5.875% to 6.5%. The prices hadn't changed in the past few months as they waited for an answer on their short sale offer, but look what happened to the cost of buying the home!
Price is important, but it's not the most important factor when buying a home. Our interest rates are going to go up and they need to go up for the economy's sake. We have all gotten used to the great rates of the past 5 years or so, but I fear that this is about to end. If so, many of you will have missed out on the best buying opportunity we have had here since 2003.
Once these rates go up, like gasoline, I will be very surprised to see the Interest rates come down below 6% or even 7% soon. My guess is once the election is over, it may get worse and we could see our interest rates back up over 8% like they were in 2001 and 2002. It wasn't that long ago ya know!
Why did the Media work so hard to kill the Real Estate market? To me it's very simple. Aside from the Iraq wore, the country as a whole was running fairly good. Most consumers were feeling pretty secure in our economy. After all, there can be a ton of things going on in the world, but as long as the individual is getting by ok and securing a good life for their family, then things are relatively good! If you remember, it was May of 2005 when the Media started on their rush to destroy the economy. The bubble was going to burst and don't get caught with your pants down! As they continued this throughout the rest of 2005 they started making a dent. Low and behold, just in time for the election in 2006, the Media convinced the masses that the housing bubble was done and foreclosures, inflation, home prices and more have destroyed our country's economy and of course it was the Republicans that did all this. It was very political.
Would we have had a bubble burst? I believe we were actually getting pretty close back in May 2005 for our prices to start adjusting. I think we probably would have had a 15% maybe 20% correction which is fairly normal. However with the Media harping on everyone, the drop was closer to 35% or more in some areas of Florida.
The moral of the story is don't wait to much longer to buy your home. If you are serious about buying, it will be come more and more difficult. Home prices are low but with Interest rates fast approaching 7% or more, you will not be able to buy the home you want as the payment will be too high.
As always, if you have any questions, please don't hesitate to ask or call. Thanks for using www.melbournehomesearch.com and www.mitchrealty.com .
Have a great night!
Mitch
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3 comments:
Mitch:
Very good post. The media does not report responsibly, usually slanted to the negative. I agree with your assessment that there is an agenda. Interest rates are headed upward. If the market declines a little more, but interest rates rise - what has the buyer gained by waiting? It has actually cost them. The media conveniently leaves this fact out of their articles.
Mitch:
Very good post. The media does not report responsibly, usually slanted to the negative. I agree with your assessment that there is an agenda. Interest rates are headed upward. If the market declines a little more, but interest rates rise - what has the buyer gained by waiting? It has actually cost them. The media conveniently leaves this fact out of their articles.
Hey John! That's what I've been trying to tell people who are on the fence. Before they know it the prices will go up, the interest rates will go up and they will be paying more for their new home.
In reality, the people who are waiting for the bottom never buy at the bottom. They always buy on the way up. The only way to know you are at the bottom is when prices start to rise.
It's the same as any business curve. If you look at a curve which I can't do on here. About an inch from the bottom on both the downswing and upswing you can put a line. We are most likely at the line on the downswing if not lower. The one constant we know is interest rates are still around 6.25%. If you go across to the line on the upswing, we know the price is the same, but we don't know the interest rates. I would doubt they would be any lower than currently. Consumers are going to buy either on the upswing or the downswing. I think now, with interest rates lower, is the time to buy.
Unfortunately the media is the media and we can't change that. Hopefully people will realize their agenda and not listen. Hopefully!
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