The "Re-tooling" of the Housing Market
by Lauren Kermode
Well, 2008 was a rough year for a lot of people – Realtor included. We’re still having a hard time understanding why the last 2 years in the housing market have been reported by the media as "a bad time to buy". Interest rates never went above 6.5%, there was more to choose from and Sellers were flexible. But instead of looking back, let’s look forward to 2009…
I like to think that the real estate market has been "re-tooling" these last 2-3 years. You know what re-tooling is, I’m sure… it’s the process that takes place when a manufacturer switches from making one product or style of something to making a different product or style. It’s usually a slow time, with a skeleton crew still working and buyers wait to see what the new line will look like before they make the plunge because generally (but not always) the changes made are improvements on the old product.
That’s what it’s been like in real estate. We’re "re-tooling". We’ve been switching from a raging Seller’s market in 2004-2006 to a more realistic market. And this may not be a popular statement with Sellers (and many other real estate agents) out there but these changes needed to be made. The market needed the correction to stay realistic and because the whole market is undergoing the correction, Sellers that sell for less now will also buy their new home for less.
Those that really got hurt by this correction were those that purchased at the height of the market with thoughts of selling even higher a year or two later. Remember, even though real estate is the single best investment you’ll ever make, when you buy your primary residence it’s a home first and an investment second and the level of return depends on other economic indicators – and the mood of the media.