This time in history is not merely unprecedented, it's NEVER HAPPENED, NEVER. There have been 2 buyer's* markets in recent history. (A buyer's market is defined by high inventory, and typically marked with lower prices)
1) 1978-82 - early 80’s rates were 18%!!!
2) 1989-1992 – early 90’s rates were 10%!!!
NEVER have we had both high inventory/lower sales prices and low rates simultaneously. If you know ANYONE NOT IN A HOME, OR ON THE FENCE ON INVESTING, I’d be happy to help so please send me there info. IT DOES NOT GET ANY BETTER THAN NOW TO BUY....EVER. I promise to take great care of them and to make you look good! If you are a first time buyer, this is the golden opportunity to greatly improve your position since there are opportunities to pay a mortgage that is smaller or equivalent to rent, but you get to the privileg of tax benefits & equity positions.
*Yes, the Great Depression was a buyer's market, but you couldn't get a loan AT ALL and values were down nationally by 50%, not 10%. So, it’s truly not a good point of reference/comparison.
Our current Buyer’s Market started in 2007 so you can see the historical trend that it will likely last through 2009, but the potential of an interest rate of 4.5% and rates in general staying at this level for an extended period is not expected. The change in an interest rate of 1% is equivalent to a 10% change in Sales Price. The fact is the Average Home Sales Price has already made the dramatic shift back to the historical trend of a 3-4% annual appreciation that has been in place for the last 70 years.
This market is both cyclical & seasonal. I’m predicting we will see the Average Home Sales Price to continue to trend down below the historical appreciation level on a national level before rallying up to the historical trend, but real estate is truly a local market when it comes to sales price. Within Atlanta we have small pockets that have seen increased sales price and not just a maintaining of sales prices, while most surrounding areas have seen declining sales prices. The FMLS reported sales prices were up 13K from Sept. ’08 to Oct. ’08, but down 9% (roughly 15K) from Oct. ’07 for the metro Atlanta market. Just know that you won’t know we’ve reached the bottom & what the best opportunities are/were, until we see them in the rear-view mirror and those incredible opportunities are gone.
Every major indicator is saying this is it! Make your move to dramatically increase your long-term wealth. Buying in today’s market gives you the potential of earning an extra 20K a year for the next 3-5 years passively by getting in on great equity positions. Who couldn’t use that?
All The Best,
Michael
Comments (0)Subscribe to CommentsComment