September 29, 2014
A Quiet Monday Morning…
After a busy weekend, I am sitting and enjoying my breakfast coffee and watching the news. This always moves me to think about the real estate market and how investing in real estate compares to other investments.
As I see today, the stock market is down, the return on bonds is lower, gold is as low as it has been in a while, and energy (oil, gas, etc.) is not doing well. Also, properties that went into contract in August were reported to be lower by over 2% over the previous year.
If everybody is selling their assets, where is all of the money going?
With regard to the real estate market, the blame is being placed on the fact that the ‘investors’ have disappeared from the market and that homebuyers have not filled that vacuum. The report did not specify whether prices were up or down, but I suspect with a weaker volume that prices are not advancing month-to-month but are probably higher than a year ago.
All of this news and speculation on my part brings me to a question; ‘Why are we not seeing increased home sales in East County, or for a bigger sphere, the entire country?’ Well, I think I have an answer. If I am wrong, please let me know.
September marks the beginning of fall which also is a traditional slowdown time for real estate, but the slowdown appears to have begun in August, traditionally one of the strongest months for real estate sales and purchases; so that is not the answer.
Here is my speculation on why, despite relatively low prices and incredibly low mortgage rates, people are not in the market. There is a lingering uncertainty in our culture at this moment. Businesses are gaining but jobs are not; people are not certain where they will be in a few months, especially in a few years. There are things going on all around the world that give people pause. Problems with war, politics, health, and the economy put that commitment to a long term major purchase a bit more difficult to justify than during more quiet times. Because of this, people are deciding to wait….until sometime in the future when things are more settled down.
Waiting is sometimes a good thing but I believe that it may be a mistake. Opportunities in the real estate market are here and now (I remember the phrase ‘Be here now.’ It sounds silly but so many people are never here nor living in the present. I am sure that your are not one of them as you have slogged through this blog.).
If you think I am wrong, or even right, please email me at email@example.com and tell me where I am off track. Many thanks!