The National Association of Realtors reported today that sales of existing single family homes dropped to an adjusted annual rate of 5.99 million in May, the slowest pace since June 2003. Pardon me, but I thought 2003 was a pretty good year for real estate sales. The median sale price was down 2.1%, and the average price was down .8% from May of 2006.
"I think psychological factors are currently the biggest drag on the housing market, in addition to disruption from tighter credit for subprime borrowers," said Lawrence Yun, senior economist with NAR. I couldn't agree more.
Yes, the boom is over, and key indicators point towards a long term buyers market, but the market is not dead, and it's not crashing. Yet the media is focused on the negative news of the day.
A recent quote from one of my favorite writers, Lou Barnes, a mortgage broker in Colorado, writing for Inman News, goes something like this: "Humans, as a species are hardwired to get the badger out of the cave now. We don't spend much time discussing wild animal experiences of the past". Yes, the market is down now, but history shows that despite occasional downturns, real estate always does well in the long term.
Home buyers need to remember that this is a long term investment. And that a down market is a great time to buy. Once the media and the public realize that this is not a crash, and the boom isn't coming back soon, but this is just the normal cyclical pattern of the market, the market should pick up. In other words, the market needs to find itself, and get comfortable again.
;)
;)
While other markets are also down, Florida and the gulf states have yet another "problem" to deal with. For reasons that few here understand, a number of professionals and government agencies put out dire predictions for the hurricane season. There may be a science to it, but in most cases they can't predict the weather for tomorrow, much less for the coming 6 months. Imagine trying to predict the number of tornadoes a given area will receive for the same time frame.
The thing with hurricanes is they will come, and when they do come they are observable from some distance away. So we don't need a warning in January that there "may be" 16 storms with 5 of them hitting land and two of them being CAT 4 or higher. Let's face it, if you are an adult you know storms come through the area. It is a fact of life that we who choose to live here accept, and our markets don't need the forecast hanging over our market every year.