OK – So I’m going to spew out some stream of consciousness thinking along the line of reasons NOT to wait til Spring in our Middle Tennessee market.
Don’t expect any statistical data supporting my monologue . . . This is all “crystal ball”
- Inventory is starting to shrink in many areas . . . and buyers are out there looking for more . . . when demand continues and supply dwindles (or becomes stale), values INCREASE and we start seeing more “Multiple Offer Scenarios as buyers pounce on well-priced and staged houses.
- The National news has been praising Nashville and Middle Tennessee in “TOP 10” Status for virtually every category as they measure cities Nationwide to see which ones have the best quality of life . . . Job market . . . Real Estate Affordability and potential up-side. Heck! We’re even NUMBER 1 as the “Manliest City”
- the Economy still sucks . . . Wall Street and the Politicians’ games have literally disgusted people with CASH to the extent that many of them are leaving “Risky Investments” (Stocks, Bonds, Commodities, etc) . . . They’re yanking their cash out of these “instruments” and stashing in safer places (Like Real Property in “safe markets” like Nashville)
- Interest Rates are STILL at Historic LOWS, and I know that most Buyers have become fairly bulletproof at the “threat” that “If you don’t buy now, interest rates will increase!” We (REALTORS and Lenders) have been singing that song now for a few years, and the rate market has been making liars out of us. Who’d a thought that the Fed would step in to the degree it did?
- The reality is that Rates WILL increase and NO ONE knows when or how much. What we do know is that once they begin to rise, they will likely rise more quickly than Buyers can react . . . and for every point of rate increase, the average Buyer loses @ 11% of their buying power
- Oh yeah! Same goes for Property Value Appreciation . . . Our next step in this process of climbing out of recession is INFLATION, and that will include property values. Word on the street of Real Estate Professionals in Middle TN is that house values will very likely “correct” to their “non-hyper-inflation” levels VERY quickly.
- Increase Mortgage Interest Rates AND House Values, and that 11% loss in Buying power goes exponential.
- Legislation could also throw a spanner in the works – The National Association of REALTORS is doing a fine job of staving off the onslaught of new bills showing up to make home purchases more “securitized” by requiring (perhaps) as much as 20% DOWN PAYMENT . . . or reducing or eliminating the Mortgage Interest Deduction . . . Who knows when or if one of these pieces of legislation will slip through and be ratified? Do you feel lucky?