There is so much negativity about the real estate market, locally, regionally, and nationally. Yes, it is true that home values have dropped markedly. Yes, it's also true that many, many homeowners face the threat of foreclosure. It clearly isn't the best of times we have ever seen. But it's also true that the real estate market is cyclical, that home prices had inflated beyond all logic and reason, and that this situation is an inevitable correction in the market. Yes, there are many problems, and it is not my intention to dismiss those problems, or make light of them. But it's also true that problems create opportunities, and this is the time for consumers to make the most of those opportunities.
The current economic crisis has created a huge inventory of homes for sale. The declining market offers buyers the chance to purchase a home at greatly lower costs than the bull market of a few years ago. Interest rates are very attractive (6.05% today for a 30 year fixed rate), and there are many programs designed to help first time homebuyers. Those programs range from Rural Development loans with 100% financing, to FHA loans with only 3-3.5% down payment, to a $7500 tax credit. That confluence of inventory, pricing, interest rates, and tax credits creates unparalleled opportunity for healthy consumers to realize the American Dream of home ownership. As Realtors, we have the opportunity and obligation to educate our prospects and clients, and introduce them to the Silver Lining that lies behind this dark cloud of foreclosure.
This also represents a great opportunity for investors to purchase homes. With so many consumers being displaced by foreclosure, there is a burgeoning need for rental units. In many cases, the current homeowner may make an excellent tenant, so the investor would have immediate and long term occupancy. For those investors who can afford to carry a mortgage for a few years, it may represent a chance to realize significant profit when the real estate market finally begins its rise.
For too many years during our unprecedented bull market in real estate, the general attitude was that home ownership was an inalienable right, instead of the American Dream. Yes, that dream has turned to nightmare for many consumers, but this shakeout could be for the best in the long run. If we as a population can adopt the attitude of our parents and grandparents, and actually learn to live within our means, actually save money and build credit, then this hugely painful experience will not be for naught. And although this opportunity comes at the expense of too many current and former homeowners, it does open doors to a new generation of consumers who can finally afford to buy a home.
I hope that this does not come across as glib or uncaring. The fact is, I dedicate much of my real estate career to assisting distressed homeowners, so I am keenly aware of the many problems and stresses facing them right now. But, just as there is much suffering and loss right now, there is also much opportunity. Yes, the dark cloud is there, but let's not blind ourselves to the silver lining, either.
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