Bonnie Cameron from Aires reflects on the health of the US property market.
Every quarter, real estate prognosticators come out with their predictions for the upcoming market. There are so many marketing updates and real estate trend reports that after a while they all lose their meaning.
Quite frankly, they can be scary! My thoughts immediately go back to the extended real estate crash of 2006-2010 in my home state of Michigan. I remember the times of sorting through my listing inventory of luxury homes, watching prices drop like a stone. No seller wants to hear that their home is now worth 65% less than their original listing price! Times became more and more desperate. One of the attorneys I worked with, who to my knowledge had never been inside a Christian church, drove out to an estate I was marketing for him to bury a St. Joseph statue! It didn’t work. Nothing was selling.
Taking buyers out to see homes brought the comment, “I really like that house, but if I wait a few more months it will be less,” and they were right! Thank you, Internet statistics! One of the buyers I was working with was a mathematics professor. He came into my office with a package of spreadsheets that he’d created with block-by-block reports of his most desired area, calculating the exact time he should make his best offer … three years in the future!
Throughout 2006-2010 the real estate predictions were positive. Without naming names, the articles still dance in my head: ‘We are predicting a strong Spring market’ or ‘Pent up buyer demand will bring a robust Fall’. All of the articles predicted a comeback that did not begin for years.
Thankfully, times are different now. We lived through that downturn. For now, the economy is strong, employment is excellent, and property values have recovered and grown. Stocks have climbed, mortgage interest rates are still historically low, and consumer confidence is high. Corporations are growing. At lease for the near future the market is decidedly strong. Home prices are rising, and though some areas show slightly less growth than previously predicted, the future looks very bright.
There are decided demographics influencing real estate purchases. Gen X’ers are buying homes that can accommodate adult children who have returned or never left. Independent Millennials are now choosing to purchase rather than rent. The Boomer generation may be downsizing or purchasing that vacation home they have always wanted. While the economy remains strong, buyers demonstrate hope by moving ahead with their home ownership goals.
What lesson do we who serve buyers carry into future markets? Real estate is not strictly a financial investment. It is also an investment in life and in the future; the launching pad for the change we each desire and carry with us. It’s the place from which to pursue dreams, build relationships, and raise people who may one day change the world.