How the Serenity Prayer Applies to Real Estate

You may be wary of either buying or selling a home in today’s market. You may feel powerless to the process. How could YOU possibly know whether the current good news about housing will continue? There is no doubt that today’s real estate market is extremely difficult to navigate. However, we want you to know that thousands of homes sold yesterday, thousands will sell today and thousands will sell each and every day from now until the end of the year.

It is totally within your power to decide whether it is the right time for you and your family to move. Even in the current market.

“How?” Let’s look at the simplicity of the famous Serenity Prayer and apply it to selling a home in today’s real estate market.

“God, grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference.”

Accept the things you cannot change

The two main concerns many talk about when discussing the housing market are:

1.      the current economy

2.      the election later this year

As an individual, there is very little you can do to impact either of those two situations (outside of voting on Election Day). The best think-tanks in the country are struggling to discover what impact each of these items have on real estate.

Have the courage to change the things you can

If you are a seller, there are plenty of buyers in the market for a home they consider priced correctly. You have to decide what the correct price is for your home if you truly want to sell. If you want your house sold, you must list it at a price a buyer will pay for it. Not a buyer from 2006 but today’s buyer who has plenty of homes from which to choose. It will take courage to sit with a real estate professional and honestly decipher the true value of your home. If you want to sell, you must have that courage.

If you are a buyer, and you believe now is the right time for your family to purchase a home – DO IT! Prices are back to pre-bubble prices and interest rates are at historic lows. That means that your monthly housing expense will be lower than any time in the last 50 years – and probably lower than your current rent payment.

The wisdom to know the difference

We all realize that the economic situation will take some time to correct. The question is whether or not it makes sense to delay moving on with your life until everything gets ‘better’. Should you not sell your home and delay reconnecting with friends and relatives that have all moved to another part of the country? Should you not buy a house and enable your kids to attend the school you have already decided is best for them? Should you spend another winter up north even though your doctor recommends you move to a climate better suited to your current medical situation?

This is where your wisdom must kick in. You already know the answers to the questions we just asked. You have the power to take back control of the situation by moving forward. The time has come for you and your family to move on and start living the life you desire. That is what is truly important.

Housing Update

The Good News Is…

the recovery of the Real Estate Market is unfolding exactly as it should and exactly as we have predicted. We are still in “Step 1” of the recovery, which basically is working to sell off the current oversupply of inventory (too many homes for sale).  This oversupply is the reason prices have not yet started to rise in many parts of the country.

The number of sales is increasing nicely and that is one way we know the recovery is taking place. When the number of homes for sale reaches a level that results in a 5-6 month supply we will then be back in a “normal” market, instead of the “buyers market” we have had over the last few years.  Once we are back in a “normal” market, prices will begin to go up at a healthy rate of about 3% per year (3% appreciation…versus the depreciation we have had).  Some other factors that let us know the recovery is under way are the fact that pending home sales (under contracts) are at their highest level since 2007 and prices on average are at 2003 levels (this shows prices have adjusted downward as a result of the oversupply).

Gaining Perspective…

on what this all means to you should be your biggest concern and that depends on your point of view.

Sellers:

This all means that your house is worth as much today as it is going to be worth for a while. Prices are not fluctuating by large amounts right now they are either up or down by very small percentages. Even when the market begins to return to normal the gains per year will be small and gradual (1% to3% annually). Some projections say that in the next 18 months there will be an increase in value of 1%… Here’s the perspective you need, if you want to wait for a year and a half for prices to go up the most you would gain is 1%, so if you have a $250,000.00 house you would be waiting 18 months for $2500.00….doesn’t seem worth waiting for, does it?  Especially when you consider what your reason for moving is in the first place. If you are moving to be close to your grandchildren is it worth waiting until they are two years old before you are closer to them just so you can have $2500.00 more dollars?  Just one example….

Buyers:

There is zero question that now is the time to buy a home. Even if you have a home to sell (see section above about Sellers). The selection of homes is incredible (Buyers benefit from the oversupply because selection is great and prices are great) Also, as of this writing, interest rates for 30 year fixed rate mortgages are 3.59% this is so low it is unheard of….this is what you would call “cheap money”!  Don’t wait until the market has recovered because if you do the selection of homes will not be as good, the prices will be higher and the interest rates will be higher….probably much higher.

Investors:

You should be rejoicing. This kind of market only comes around once in a generation or so.  Money is cheap and prices are low. The rental market is extremely strong right now, it’s certainly a “landlords” market. Houses are now cash flowing and showing very good returns on investment. Investors, if you wait, you will miss your best chance at earning the wealth that history proves is best earned in real estate.

In summary, sometimes in life you really have to step back and gain some perspective. Waiting is sometimes the right course of action…as long as you know the value of what you are giving up by waiting….

You may make 1% more or you may lose 1% less but maybe not….the one thing you know for sure is that time waits for no man (or woman) – you can never get today back.  You can never spend the time with your grandkids that you’ll miss while you are waiting on a 1% gain to your home’s value.  Don’t be the one we have all heard say….”If Only”….