Who Is Saying It is Time To Buy a Home? EVERYONE!

"Enough with the doom and gloom about homeownership." - WSJ 9/16/2010

WOW! If that quote was attributed to the National Association of Realtors or the National Association of Home Builders, it would have been quickly dismissed. However, it was the Wall Street Journal that was calling for the end of the ‘doom and gloom' talk surrounding real estate.

We are finally seeing a powerful backlash to all the recent claims that homeownership should never have been part of the American Dream. It is about time!
The WSJ has been posting on the financial advantages and the other non-financial benefits of homeownership for over a year. "We must admit that, at times, we felt very lonely. It now seems that we are part of an ever growing army of believers preaching the advantages and opportunities available in today's real estate market. Who have joined this cause? Let's name a few."

The Nation's Real Estate Pricing Expert

Karl E. Case is a professor emeritus of economics at Wellesley. Professor Case is also co-creator of Standard & Poor's Case-Shiller House Price Index and is recognized as the one of the foremost authorities on real estate today. In a New York Times op-ed piece earlier this month titled, A Dream House After All, he said:

"I have never quite understood what the American dream really means when it comes to housing. For some people, it means having a solid and fairly safe long-term investment that is coupled with the satisfaction of owning the house they live in. That dream is still alive."

"Others, however, think the American dream is owning property that appreciates by 30 percent a year, making a house into a vehicle for paying bills. But those kinds of dreams have become nightmares for the millions of foreclosed property owners who have found themselves sliding toward bankruptcy."

But for people with a more realistic version of the American dream, buying a house now can make a lot of sense.

The Wealthy

The only segments of the housing market that are showing sales growth are the price points over $1 million. That market is up 6.1 % in the second quarter of this year vs. the second quarter last year. A recent survey showed that over 30% affluent buyers are planning to either build/buy a new primary residence or a second/vacation home in the next twelve months. It appears the wealthy believe now is the time to buy!

Everybody Else

Fannie Mae just released their National Housing Survey. The survey reported:
• 82% of respondents consider homeownership important to the economy, up two points from January.
• 70% of respondents think it is a good time to buy a house (of which 36% think it is a very good time to buy), up six points from January. This is also four points higher than the 2003 survey - well before home prices peaked - when 66 % said it was a good time.

Bottom Line

Our iconic financial newspaper, our nation's real estate pricing expert, the wealthiest people in the country and 70% of everyone else think now is the time to buy a home. It probably makes sense to listen to them.

The Fall Harvest Applies to Housing too

Mark your Calendars! According to the U.S. Naval Observatory, autumn begins on September 22 at 11:09 PM EDT; it’s just about official, summer 2010 is over. The Autumnal equinox is coming, and you can feel it in the onset of that brisk autumn air, as well as with the number of home sales hitting the streets!

September marks the official kick-off of the fall real estate market, and in Richmond, Virginia we are beginning to see the signs of the new housing inventory offering purchasers and sellers a second chance to reap the benefits of the second gathering. Like the change of seasons influencing harvest time, these annual cycles also influence home sales. September, October and into November is the second hottest time of year to buy and sell following the robust and often frenzied spring housing market.

Historically, the Autumnal Equinox becomes synonymous with not only the completion of the harvest, but also the end of summer. The full moon associated with the fall equinox is known as the Harvest Moon and sometimes as the "Wine Moon" because this is also the time of year when grapes are harvested and the process of making wine begins. In past times, many farmers would harvest their crops by the full moon, using the light from the moon to extend their gathering time. This final gathering of the crops and the beginning of preparations for the long winter that lay ahead marked a time of thanksgiving for all that Nature has given her children and for the completion of another turn of the Great Wheel of life. Although the Autumnal Equinox falls in September and not November, the connection to the harvest and the fall highlight similarities to our modern Thanksgiving.

If is interesting to see how these seasonal cycles are often mirrored in our modern lives. The change of seasons that influence our life styles and purchasing trends today are somewhat similar to the way we all used to live when the change of seasons actually dictated how we live. It makes one wonder if the two are somehow linked?

For more info about the Autumnal Equinox: The time of year when night and day are of equal length in all parts of the Earth is known as the “equinox”. The word equinox comes from a Latin words meaning "equal night." Autumnal equinox is the beginning of autumn. It occurs on September 22nd or 23rd.

If you are interested in exploring more, here are some sites with more detailed explanations of the equinox:

http://scienceworld.wolfram.com/astronomy/AutumnalEquinox.html

http://earthsky.org/astronomy-essentials/everything-you-need-to-know-about-the-autumnal-equinox-of-2010

http://www.infoplease.com/spot/equinox1.html

Richmond’s Small Town Charm Offers Hope & Optimism

Ann and I just went over to the Libbie Market to grab a quick bite to take back to the office. The wonderful thing about Richmond is the fact that almost anywhere you go you are all but certain to run into someone you know. Well today is no exception. We ran into a friend of mine from college. She owns and manages a small placement firm that specializes in finding work for mostly mothers that have so much to contribute to the work force, but also wish to manage their families in addition to generating an income.

The almost unexpected thing came out of our conversation when I asked how her business has been. She, by the way, has adorable twin boys that you can imagine demand much of her attention. Regardless, she said business has been amazingly good. She continued to say that the number of people she places has been great, and, here is the really wonderful news, that the number of companies contacting her for help has also increased this summer.

After all the negativity and hesitance I get when asking “how’s business”, I was momentarily shocked by her response. Then delight and confidence seem to fill up inside me as if to say, “see, there are good things happening in the work force today; I wonder why we don’t hear more stories like this one from our media outlets?”

I like getting the good news and spreading the word about good fortune and hope. It makes me feel good, and I like feeling good. Hopefully this will inspire you have a great day and pass on your good news to others, increase your productivity, and improve your business. Who knows, this small town might just start a trend that proves a positive approach to living can jump-start our economy. I’m firmly committed to it, how about you?

Follow up Post - Low Interest Rates . . .

As a follow up to my blog post yesterday 9/8/2010 regarding “What is the wait in Richmond Real Estate” – regarding “low interest rates”, the Long & Foster Marketing Minute provides the following example:

“Let’s talk about the “missed opportunity” on the tax incentives. Let’s say first-time home buyer couple is looking at taking a 30-year loan on a $340,000 home, which was the average Long & Foster sale price in July. If they had purchased in early April, in time for the $8,000 credit, the interest rate probably would have been around 5.25 percent.

If that same couple bought today and locked in a rate around 4.5 percent, they would save more than $130 per month on the mortgage payment compared to the early-April purchase.

Even if they only live in the house for 10 years, they would save more than $16,000 in interest. These record-low interest rates mean buyers "match" the $8,000 they would have gotten in tax incentives if they live in the house just five years.”

Consider spreading the word and sharing the secret that the media seems to conveniently overlook. There is good news in the real estate market, and as professionals it is our responsibility to send the message in order to combat the lingering negativity in our marketplace.

Facts & figures courtesy of Jeff Detwiler, president and COO of Long & Foster Real Estate

What is the wait in our Richmond Real Estate Market

The Richmond, Virginia metropolitan region of Long & Foster Real Estate met today for a Town-hall gathering. Several hundred local real estate agents, brokers and sponsors attended this special event which spent much of the morning commenting on the state of the company and the realities of real estate in our market sphere. The most important message I took away from all this is, of course, that with the amazingly low interest rates available to consumers today, and the apparent stabilization of real property in our area, it is perhaps the most affordable time in our history to purchase a home. So what is everyone waiting for?

Well, first, this premise presupposes that one has a relatively stable/secure job, ensuring enough confidence and providing proper financial wherewithal to make the next step into home ownership – or to make a move-up purchase. This is without a doubt a HUGE obstacle for anyone to see beyond, and if you’re risk adverse, it may not be manageable. But is the risk any greater today than four years ago when lenders were literally giving away mortgage loans while home prices continued to skyrocket through the heavens? Honestly, I just don’t get it!

Secondly, the media seems to have cornered all futures in real estate. I think it is too easy to pull the media card whenever our woes exceed rational justification, but you have to admit there are no headlines out there promoting the long-term benefits of the current interest rate. As a fellow realtor mentioned this morning, we should be shouting about the best kept secret in the real estate market – low interest rates are far better than any tax credit the government can offer. Just do the math! But hush; don’t tell anyone, it’s a secret. Maybe then the public, and possibly the media, will take note and make a step toward home ownership and a sound life’s-investment.

I can’t say what it will take to help people feel better about real estate, but my business tells me that the housing market continues to improve. Someone must be feeling better about things, because the difference between what is going on today over just a year ago is astounding, and our numbers/statistics reflect this notion. The caveat to this observation is that we need to continue looking forward and forget about what’s in the rearview mirror. The years of 2005-2007 are thankfully gone. There is a new reality out there now for all of us to observe, just ask your REALTOR®. The honest truth is always plain to see!

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