Optimism and Real Estate

Optimism and Real Estate¦Medicine We Can All Use!

The moment has passed. We have a new president. What does this mean for housing prices, mortgages, and our state of mind? Emotion plays a huge role when making one of the most important purchases of one’s life…buying a home. As we watched the endless campaigning, the candidates needed to address all of the negative aspects of our economy. This was a critical discussion that needed to be at the center of their respective campaigns. The down side of that less than positive talk was that we all carried the economic pain with us every day. How could we expect to go out with confidence and buy that car, and especially a home!

Now we can focus on the positive solutions to our future as a nation and for our families. We can take advantage of some increasingly positive realities which are the result of a weak real estate market. For buyers, prices have fallen on the average of 10-15% over the last 5 years. This is good news for a purchaser who is focused on affordability. The interest rates are still at historic lows (6.25% for a 30 year fixed mortgage), and financing is plentiful. That’s right, financing is plentiful! A first time buyer can obtain a 30 year fixed rate loan with a 6.25% interest rate with only 3% down! FHA (government backed mortgages) loans are available to any buyer with the income and credit to support the payments.

For sellers, keep things in perspective. We are all angry over the fact that money was so easy to get that a stethoscope was all that was needed to qualify for a mortgage. Even if the heart beat was weak, there would be a way to qualify for a loan. Those days are over. But, there was a positive side to that reckless financing. Property values were rising at record levels because so many buyers qualified for these terrible loans. We all know that the first rule of economy 101 is supply and demand. There were countless added purchasers in the market that would not have been able to buy if sound financing rules were followed. Therefore, this influx of buyers caused the hyper inflation in real estate. So think twice if you are mad about your current home value, as it never would have increased 20% over the last 5 years if these bad loans were not made. Prices are back to where they were before the irresponsible lending began. Were you happy about your home value in 2001? If so, nothing has really changed except the memory of artificial wealth we all felt so good about for those 5 years of loose mortgage lending.

If you own a home and looking to buy another home, then do it now! Yes, you may get less than you had hoped for but the property you purchase will also be discounted. The good news is that financing rates are favorable and inventory is more plentiful so that you have more to choose from at favorable prices.

The bottom line is optimism. Take a realistic positive view of our current real estate market based on the facts I have presented. The sky is not falling and home ownership will always be a top priority for anyone in the world. I belong to the Optimist Club in my community. We recite the ‘optimist creed’ at the end of every meeting. The following is a part of the creed that may help to ease your tension and fear about the current economy: “Promise yourself to be so strong that nothing can disturb your peace of mind. To talk health, happiness and prosperity to every person you meet”. These are words to live by and guide you through this challenging period in our history!  

Bruce Nemovitz is a Senior Real Estate Specialist, as well as Certified Senior Advisor. Bruce has sold residential homes in the four county Milwaukee-Metro areas for 30 years. He has just published a book called “Moving in the Right Direction”, a Senior’s Guide to Moving and Downsizing.  He works with his wife Jeanne and assistant Boni at Realty Executives Integrity.

Please feel free to call Bruce or his team with any real estate questions, you may have at 262-242-6177, or email at Bruce@BrucesTeam.com. You can go to their website at www.brucesteam.com and view the many articles and important information related to moving and downsizing!