Who was it that said, when others are excited that's the time to sell and when everyone else is scared, that's the time to buy? Warren Buffet? It might have been said about the stock market, but it totally applies to making money in real estate in my opinion. I'm not a real estate agent, but I have bought 8 homes in both slow and hot real estate markets.
If I hadn't bought my dream home on Mother's Day two years ago, I'd be selling and trading up right now. This is a great market to buy in if you're ready to trade up to a better property or you're a first time buyer. If I was a real estate agent, I'd really be pushing this idea hard. Let's do the math:
If you currently own a $300,000 home, when the market goes up 10%, you'll be ahead $30,000.
If you currently own a $500,000 home, when the market goes up 10%, you'll be ahead $50,000.
In other words, if you're sitting in a $300,000 house right now, and you can afford the increased mortgage payments of owning a $500,000 home (which may not be hard at current historically low interest rates), when the market does rebound, you'd be ahead $20,000 if the market only goes up 10% (and it will likely go up way more than that). That $20,000 would offset the costs of moving and you would be living in a way nicer house.
This assumes you've been living within your means up until now of course. If you haven't, consider how much less power you have because of it and resolve to dig yourself out of debt. But that's a subject for a whole other post!
For first time buyers, housing prices are finally within the realm of affordable and interest rates are ridiculously low, so it's no surprise that first time buyers represent over 40% of the market right now. As a home stager, that's great news, because this is the crowd that would be most influenced by home staging.
Looking at attractively decorated and well-maintained properties is way less scary for a first time buyer.
I'm reminded of this every time I go to the gym and my trainer tells me about all the house showings he's been on. Like 90% of people, he can't see past cracked walls, ugly carpet, burned out light bulbs, overcrowded furniture and clutter. To him a house is exactly what it looks like, no imagination required. One of these days he's going to walk into a house that's staged for a young guy looking to put down some roots.
As soon as that happens, he'll stop throwing over $1000/month down the drain in rent and sign on the dotted line.
With over 5.2 million houses projected to sell in the US in 2009, there's a huge need for quality home staging. If you're a home stager, I recommend looking at how you can use the current market conditions to your advantage rather than letting them discourage you. For more information on how the current economy and slow housing market will affect the home staging industry, check out this free report.
Debra Gould, The Staging Diva®
President, Six Elements Inc. Home Staging
A compulsive home buyer, Debra Gould took her passions for real estate and decorating and turned it into an internationally recognized home staging company featured on CNNMoney, MoneySense, HGTV, The Wall Street Journal and more. Since 2005, she's been teaching others how to become successful home stagers in the Staging Diva Training Program. There are currently over 1000 Staging Diva Graduates on 5 continents. Debra encourages anyone concerned about starting or growing a home staging business in today’s economy to download her free special report: “Ask Staging Diva: Can I grow a home staging business in a depressed economy?”