What? That's crazy! Haven't you heard the news? It's a buyers market, the market is flooded with foreclosures, and banks aren't lending money.
Well maybe not. First, banks are lending money. I've yet to have one qualified buyer turned down for a loan. Underwriting is taking a little longer, and sometimes they are raising issues the day before closing, causing a delay, but they are still making loans.
Second, listings are down. Plus a big portion of the listings that are out there are in foreclosure and in poor condition. Because of changes in the lending industry, first time buyers are almost exclusively buying with FHA loans. FHA has certain requirements for the condition of the homes it will back a mortgage on. Most of the foreclosures don't qualify. So the fanciable inventory is down even further.
Third, who wants $8000? Any guesses? Give up? The answer: everyone. This means more buyers.
This is creating a situation where the number of qualified buyers is out growing the number of attractive fanciable well priced homes. We are seeing homes sell in a week, in a day, in a few hours. They are all well priced homes, so don't confuse this to mean that your home is actually going up in value. Buyers still have high expectations for what they can get for the money. But your chances of selling may be better than you thought.
Heard any news about the real estate market lately? It’s for real. Prices are lower. Homes are being foreclosed on. The bad mortgages are affecting everything in the financial markets. But are houses really the worst investment you could have made?
Since 2001, the average price of a single-family home in Nokomis has gone from $170,066 to $222,542. In Longfellow, the average price was $155,226 in 2001 and $192,772 today. And that number doesn’t consider that many foreclosed homes in rotten condition are skewing the numbers lower. In the same time, the Dow ended up right where it started. Simply, your investment did better in the housing market than it did in the stock market.
But that’s not the whole picture. How many memories have you made in your home? How many have you made in the stock market? Remember that time that you had your entire family over to your stock portfolio for Thanksgiving? Remember your first Christmas tree in your stock portfolio? Remember watching the snow fall out the window of your stock portfolio? No matter how cold it got, your stock portfolio always kept you warm at night.
You don’t have to invest in the stock market. But you do have to live somewhere. And in the long run, it’s better to own that home than to rent it. That doesn’t mean you should buy a home you can’t afford, or buy any home before you can afford it. But the dream of owning your own home is still a valid one. But if you treat it like the stock market and think that you can buy and sell at will as you try to build your fortune, your dream will return the favor just as reliably as the stock market. But put your dream of family and love into that home, and it rarely disappoints.