Well with the start of the year comes the unofficial start of the home buying and selling season. And contrary to what we all hear from the news it is not all doom and gloom! Yes, home prices are down and inventories are up nationwide. Yes, foreclosure rates are up. Yes, the sub prime mortgage debacle has tightened lending practices and made it more difficult to qualify for a mortgage. And if you believe everything you hear in the news, the housing industry is single handily taking down the US economy.
Well I am hear to tell you to wake up and don't believe the hype! Over the last 5 years the housing industry was off the charts, new homes were being built at record paces, appreciation was huge and the term "flipping" became part of everyone's vocabulary. Yes, Real Estate was an easy way to make money. Is that true now, no. But what is true is, it still is your safest and best investment out there.
The market needed a correction, it was out of control. We needed to come back to realty and weed some of the things out that were taking us out of control. It is a good thing the sub prime mortgage industry took a hit. Yes, some good people out there were hurt by it, but most of the people getting hurt are not financially sound enough to own a home. Worse yet, they used a sub prime mortgage just to buy a bigger home because they wanted one, or "flippers using the loans to buy home and flip them quickly for a profit. None of these are truly good long term for the housing industry.
The foreclosures are a problem but if you look at the areas that are hardest hit there is a reason. California, Arizona, Michigan, Ohio and Florida are some of the states with rapidly growing foreclosures rates. California, Florida and Arizona had some of the highest appreciation over the last 5 years. Many speculative buyers drove up prices and unfortunately this was bound to happen. Michigan and Ohio are suffering from large job losses and foreclosures usually follow. The good news is, there will be some good deals for buyers looking for foreclosures.
2008 will be a good year, especially in Northwest Indiana for Real Estate. For sellers, wake up and come to realty. You will not get 2005 prices for your home, but if you listen to your realtor, price it at market value you will be able to sell it fairly quickly.
Buyers, if you are thinking about buying a new home, now is the time. Interest rates were lowered again to almost 6%. That is a great rate. Get pre-approved and get your realtor working for you.
The quicker we all look past the doom and gloom from the media and realize we set records in the past 5 years for units sold and home values, the quicker I feel we be able to help the entire housing market.
We set records for the past 5 years in both units sold and prices. This is not the end of the world, just a normal real estate cycle.
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