Today's buyers are afraid. Afraid of what? Afraid that they aren't getting the best deal. And, that is doubly true when they are selling one house and buying another.
They don't want to lose equity if they are a homeowner, but they need to see that they are getting a more valuable property,
Now what about the first-time home-buyer? Almost everything they have ever bought has lost its initial value. That new car that they just drove off the lot? It lost thousands the second the buyer took it off the lot and into the street. New iPad or iPhone? It will be worth about a quarter of what was paid for it in about six months.
Nothing these days keeps its value of NEW for long. T
When we talk real estate with these clients, they need to understand that housing is likely not going to appreciate at any rate over the next decade.
What they are buying is freedom from a landlord, freedom from listening to the couple upstairs, downstairs or next door making whoopee and the freedom to put a nail in the wall to hang that great piece of art that unless it is an original from a well-known and in-demand artist will also depreciate.
Gen X and Gen Y consumers don't believe that homeownership is the way to build a solid portfolio of investment. And, they are right. But, it is a way to keep more of your own money in your own pocket, for now, with the mortgage deduction still in play.
No one can predict the future. But historically, housing has kept its value better than stocks. And, stocks in a company that folds can be far, far worse than losing a couple of thousand while you search for a better home in a better neighborhood.
And, if you need to remind them that the handbag or suit they bought last year in the posh store is now worth almost nothing, do that.
That spendy watch? Only worth something who wants that exact same watch with those features and still not even close to what was paid for it. And, that vacation.....poof! Maybe a few photos, but that's it....and bragging rights. Oh, yeah.
As realtors, we need to tell them the straight skinny. The house might be worth more....but the house could be worth less. It's a crapshoot most of the time. What they are buying is a place they can call "home".
A "home" like they grew up in, and one they will want to provide memories of for their children.
Just a thought. Now go sell something!
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