This story was my “Good Morning” today. The AP and AOL conducted a poll, and while the story is probably accurate (technically), I am seeing a serious bias here. And I really don’t like to play the media bias card… Let me toss out a couple of quotes from the article:
The growing reluctance to dip into the housing market seems to stem partly from worry that housing prices will continue falling — good if you’re buying a house but bad if you have to sell one.
…
The public anxiety is in reaction to an economy that is veering toward recession and losing jobs even as the housing market sputters badly. Foreclosures have soared to record highs, mortgage rates have increased, sales of existing and new homes have fallen and home values have dropped.
Of course, with a title like AP poll: More avoid buying homes, one shouldn’t expect it to be rosy…
Same story… different quotes:
Some pockets buck regional trends. Laurie Jensen, a single mother of three, struggles to make payments on her home in Whitehall, Mont., by working as a seasonal road construction flagger and at times collecting unemployment. She said she’d like to move outside of town, but the area is popular and prices have surged.
“Things are pretty crazy,” she said. “Places I don’t consider that great are really expensive.”
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Even so, he said, many people bought their homes before the run-up in values that started around 2001 and remain in good shape.
“So the value of your house goes down temporarily,” he said. Unless the homeowner must sell now or can’t afford the payments, “that doesn’t have that much of an impact.”
There are a lot of stats in the article… but, as you read it, try to stay open to both sides of the picture…
“This is a great time to buy, but not necessarily to sell,” said Robert Jackson, who lives in a two-bedroom house in Ferguson, Mo., with his wife and four young children. He said he would love to purchase a larger home, but can’t because even if he found a buyer, he would probably lose thousands on his house, which he bought less than two years ago.
“We’re just going to have to slap a Band-Aid on it and stay here until the market gets a little bit better,” Jackson, 30, said in a follow-up interview.
Let’s look at this a bit more objectively. If Mr. Jackson can afford a bigger house, he should do it. The same “discount” that drops the price of the home he would be selling would be dropping the price of the home he would be buying. If he loses $5,000 to gain a $10,000 discount on the $200,000 house he wants for his family, that seems like a good net to me. I just don’t think that the best plan is to wait until the prices go up on both homes…
Now, if he were retiring and wanted to sell his big house and down-size… I’m right there. It wouldn’t be the best time. Taking the $10,000 hit to get a $5,000 discount isn’t good business.
Here is a another…
One in 10 have adjustable rate mortgages, half of the number who said so two years ago. These mortgages generally start at a low interest rate and are later adjusted to market conditions — which has often meant steep, unaffordable boosts that have forced many to refinance or even lose their homes.
Daniel Gallego, a warehouse worker in Stockton, Calif., said he may have to sell his home at a big loss. He said rising gasoline and other costs have made his adjustable rate mortgage unaffordable. Because he doesn’t expect his home’s value to recover soon, he said he may be better off moving now, before his rates rise.
So, nothing positive to say about fewer people having adjustable rate mortgages? Nor a mention that the resets have been less than expected because of the slowing economy… I’m not even going to hit on the idea that many of the adjustable rate borrowers weren’t real responsible taking out loans that they really didn’t have a plan to be able to pay back…
There is no doubt that the real estate market is not groovy for a lot of people… especially those that need to sell. However, the fact remains that it isn’t as bad for most as it is for a few. There are some pockets that are incredibly bad… and many in the media are portraying those as representative. There are also a lot of places that are just chugging along.
I also don’t want to chime in with the NAR’s “All Real Estate is Local” mantra, but you really should look into the area that you are in and/or considering. Heck, I’m starting to see builders jumping back in again.
