When I think back on all the missed opportunities that I have had in my life, I always think why I didn't act and how things might have been different if I had. If I has purchased Google as an IPO, I'd be incredibly wealthy. At $100, I'd still be very content. $200, you get the idea with Google trading at $575 today. We all do it because hindsight is always 20/20 and not all of us are huge risk takers. Those that gamble large usually win large but some also lose large, enough so that it keeps those who are cautious from ever playing the game. The same holds true to real estate especially now.
Just so that you are aware, I am all for you purchasing a home now and that's why I blog. I don't like to rely on unfounded conjecture but I present rational arguements as to the benefits of doing so. Tremendous opportunities abound like we haven't seen in a very long time and probably will not see again. I had clients who are absolutely scared to make a move fearing what they've read and heard on the nightly news may be true. Now, they're rethinking their actions in the face of rising interest rates. Have you ever stopped to think what motivation the folks have who are discouraging to from purchasing real estate in Charlotte today?
When I sold real estate in the HOT sellers market around Washington DC, I can recall financial magazines writing as early as 2002 of the housing bubble that was sure to burst imminently. I guess if they kept printing the same story, eventually they would have got the timing right. Their motivation is to get you to buy their magazines and newspapers, watch their newscasts and visit their websites. Dog bites man isn't as much a story as man bites dog and the same holds true for MORTGAGE MELTDOWN...CREDIT CRISIS instead of Banks who Lent Money to Risky Borrowers Face Loses.
So here's the indisputable facts:
- If you try to time the market for the absolute bottom or the absolute peak, you'll miss both.
- Interest rates will go up. Pressure from inflation and the weak dollar will cause the fed to raise rates and it will cost you more to borrow the money for a house that costs less. Here's an example of how waiting will cost you.
Finally is the realizaton that every town, city, and state are different. Every community is different just like how you and I are different. Yes, what happens to the market in California does have an impact on real estate here in Charlotte but the impact is minimal. If a buyer for your home has to sell a home from where they are moving from, they are only but a few choices: wait until the other home sells and rent locally until then, pay 2 or more mortgages, or pay their way out of their old property.
So the idea that things are absolutely bad and that the best thing to do is to wait, it's a costly one and I guess it speaks to how altrustic you are. If you like paying more interest to the bank, then by all means wait. In fact, you may not have to wait because I'm sure that any lender would charge you tomorrow's higher rates today if ask. But that's insane, right?
Your Trusted Real Estate Adviser;
Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate
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