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RSS FeedReal Estate Reports are Full of Misinformation |
Posted at Realtor Information Center by Paul Roy
Jan. 3, 2008
Categorized in: Tri-Cities Market Conditions
Reports of declining Real Estate Market is full of misinformation
By Paul Roy, Sales Manager, Coldwell Banker Tomlinson Associated Brokers
I can’t go anywhere, without hearing people ask about how bad the market is or talk about "the real estate bubble."
Real Estate Professionals in the Tri-Cities are getting these conversations all the time. This in despite of the truth that in our own local market and other markets across the country, despite all the negative press, we and many other markets are on pace to have one of the best years to date.
That’s why such negative talk is challenging to the general public. The reason for this challenge is trying to understand why it is still a great time to buy or sell a home when all they seem to hear in the media is that Real Estate is on the decline.
Therein is the problem. It's no secret that sensationalism retains an audience and has become the darling of today’s media. No wonder buyers and sellers are sitting on the fence or, worse yet, thinking that sellers must be desperate to sell. Even when the news is positive, you will not find it on the front-page headlines.
In spite of what you read in the paper or hear on TV, 2007 was the fifth best year on record, nationally. Locally, it is on pace to be the best or second best year ever. The economic forecast from the experts who are hired to study real estate nationwide tell us we are likely to have a decline of about 1.7 percent in the national median price, but this is after a more than 50 percent rise in values during the recent boom.
Why are we hearing about double-digit losses in a state like Florida, that has no relevance to our area? Our weather page doesn't say "Rainy today in Florida," it tells us the weather in Tri-Cities. So please tell us that in the Tri-Cities, the average sales price this year has increased over 6% percent from 2006 through November 2007. Matter of fact the average appreciation has been 5.5% each year for the last for the last 10 years. We are very insulated in our region.
How fortunate we are in the Tri-Cities to have that perfect combination of a strong economy, low interest rates and a ample supply of housing inventory. Real estate has always been one of the best investments you can make. We need to get back on the page of understanding what home ownership means to us.
Besides the financial benefits of owning a house, there are many social benefits. Home ownership creates stability for owners. Homeowners demonstrate higher income and educational attainment, higher civic participation, higher self-esteem from perceived self control and even better health conditions -- so say the "experts" who are paid to research and forecast the market.
Here is one very good reason to buy a house if you can. Did you know that according to the Federal Reserve, between 1995 and 2004 the average renter accumulated $4,000 in wealth? In contrast, the average homeowner accumulated $184,400.
Negative press that says the market is going to drop 10-20 percent in a year paralyzes buyers who want to buy but sit on the fence because they are fearful they will buy before it hits rock bottom.
Wrong strategy. What's likely to happen is that mortgage rates and house prices will go up. Sellers are going to price their homes to move on and those buyers who are trying to time the market are going to find the ship has left port without them.
Right this minute we have the perfect match of inventory and low interest rates and if you leave out the negative hype we see on TV and read in the paper, the buyers who truly want a place to live need not wait.
If you want to know what really is happening in the real estate market -- ask a Realtor who is in the trenches every day to give you the facts of our market.
Paul Roy is the Sales Manager and Associate Broker at Coldwell Banker Tomlinson Associate Brokers. His e-mail address is proy@cbtabs.com
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