Buy LOW – Buy NOW!

If you’ve been waiting for the right time to buy and/or sell a house, your wait is over.

Warren Buffet apparently agrees . . .

As does Dr. Lawrence Yun (Chief Economist for the National Association of REALTORS) who we heard speak at yesterday’s “Market Watch” talk here in Nashville. He danced around it best he could by emphasizing that ALL home Buyers must buy homes when the time is right for THEM and not because the “Experts” tell them.

Dr. Yun is mostly right about that – Not all people are ready NOW!

He went on the make the oh-so-subtle point that Mortgage Interest rates will rise in 2015 . . . Inflation will kick in in 2015 . . . thus the buying power of Buyers’ money will DECREASE as time marches on.

and . . . none of this analysis takes into account some of the more macro issues like:

Chinese GDP growth year over year is 7-9% While the USA plods along @ 3% YoY – On the surface, it appears the Chinese could surpass the USA . . . but probably not because:

  • Even as The Chinese Economy is GROWING (2nd Largest economy on the planet), China’s population has a very fragile public confidence in the value of their currency.
  • Where will the Chinese be buying oil in 3-5 years (HINT: The Americas). They will likely be shifting their oil imports from the Middle Eastern Countries and will rely more on the Americas (Canada/USA) for their oil

Dr Yun said some pretty darned wise things:

  • (Political) “standoffs” rattle markets and damage consumer confidence
  • “Sequestration” predictions of doom and gloom were overstated because the projected negative effect was offset by an increase of consumer spending.
  • Private money is providing most of the recovery – Businesses and banks are flush with CASH.
  • the US trade deficit is shrinking
  • We are amidst an “Energy Renaissance” as American oil production spools up
  • We’re not “There” yet on jobs recovery – The unemployment rate formula is flawed – We have recovered to @ 70% but that still doesn’t account for college grads not able to find jobs.
  • 58% of American are unemployed
  • “America is a VERY Generous Country”
  • From “Economics 101” in college, the result of the Federal Reserve “Printing money to buy assets (Hedgefund style) SHOULD result in unhealthy INFLATION . . . but that inflation hasn’t happened here in the USA BECAUSE National and Global confidence in the value of the US Dollar is intact . . . Everyone seems to TRUST our currency to the degree that it is the ONLY currency that could be labelled a “Global Reserve Currency”
  • Banks are sitting on a pile of money and are still being sluggish and difficult about approving mortgage loans . . . ESPECIALLY for new construction (Most building that’s happening these days is privately funded) – New Construction starts are at a 50 year LOW
  • Housing affordability is at an ALL TIME HIGH
  • HOUSEHOLD FORMATION has SPIKED (Is BURSTING out) which will likely result in improving housing markets for the next 4-5 years.
  • The number of renters is INCREASING (Witness the increase in local apartment new construction and increased investor purchasing of single family, duplex, multi-family properties)
  • The number of Homeowner Purchasers has FLATLINED – There are not more buyers in the market – Just fewer active REALTORS and the shrinkage of the housing inventory is not much more than a return to “normal” levels in the market (Annual 3% increase in values on average)
Bottom line (any way you slice this animal):
“Cost of later purchase is HIGHER”
Disclaimer: It’s entirely possible I have unintentionally misquoted Dr. Yun in some minor ways . . . Generally speaking, much of his talk was very validating for my current line of thinking relating to the health and progression of the Local and National economy and real estate market . . . Some of the above is a co-mingling of my interpretation and Dr Yun’s comments 🙂
PSST: I and the “Vital Few” agents of Pareto Realty stand poised and ready to serve Home Buyers and Sellers throughout Middle TN. Daily, we are studying market trends so we can advise our clients best. Connect with me (and subscribe to my daily blog) to learn more.

 

 

Published by Barry Owen

Strategist-CEO of Pareto Realty Real estate sales Professional Inviter-Facilitator-Practicer of Open Space Technology Opening safe space for people & organizations to self-organize around issues & opportunities BarryOwen.US Invite-Listen-Love

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