Who's Buying?

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That's a great question whose answer is not all that obvious if you follow the major media reports on the housing market. Let's start with experienced buyers: People who have been through a number of different markets are different from first-time buyers. Many have purchased and sold a number of properties over the course of their lives, and realize that when they sell then buy, they are doing so in a roughly equivalent market as long as they are in the same general area. Whether home prices are high or low, rising or dropping, they understand that their lifestyle needs trump whatever bumps, dips or manias may be at work in the market at any given time. They need a place to live every day, and with their experience they prefer to retain an ownership position in the market. Over time, it has worked well for them and has built their net worth. First-time buyers are naturally insecure about the prospect of buying a house, or with prices the way they are, a condo or townhome as a first-time purchase. With more than a third of the population being renters and this part of the population being the primary source of first-time buyers (naturally!), there can be considerable fear and perhaps not a lot of support or encouragement from friends or family for the first-time buyer. Now, even with interest rates near historically low levels, the media is only reporting problems in the housing market, and it does tend to depress first-time buyer activity. There's a fear factor of 'making a mistake' and everyone has a friend or relative who is only too willing to warn you off of doing just about anything. I won't get too much into how supposedly well-meaning friends and family too often give bad advice and squash one's dreams, but it happens regularly. But for those who have had good advice and family support, home ownership and not renting has consistently been the winning strategy over time. Investors and flippers have been a significant part of the market from around 2002 to 2007, and there is strong evidence that low interest rates, easy credit qualification, high rates of appreciation combined to create a lot of paper wealth for many. Now that the music has stopped, there are a number of people who got in the game late and are left with short term investments that are depreciating and whose monthly negative cashflow with larger mortgage payments are stressing the finances of the fast money seekers. Of course for those who sold at the top and went to cash for a while, now may be a great time to get back in the market. There are a number of distressed properties that have come on the market. While our local area is not plagued by an overwhelming number of foreclosures, there is a slow-moving wave that is building and for those sharp investors out there, there are some real deals. Many investors with not only the desire, but the ability, will acquire rental properties during this market and build long-term wealth. There will always be move-up buyers who have sold their old small home and want a better and larger home. There are move-down buyers who do the deed before it becomes a distress situation, and sell the large and expensive home and consolidate into a smaller and less expensive home. Some portion of the buyer market is a move-in buyer, who through job transfer from out-of-the-area or a lifestyle choice to move from urban areas ot suburban paradise, will buy a home in our market area. With the problems with the State of California budget, increasing unemployment, upside-down equity, and stretched individual and family budgets, the move-out seller may be more in the news. Speaking of lifestyle changes, the big changes of marriage and divorce, births and deaths, empty nesters and blended families will always generate some numbers of home buyers, many with homes to sell first. Young and old, and everything in between, are subject to changes in circumstances or finances or lifestyle either by choice and volition, or as a forced choice, to make a move to better or more appropriate housing. One of the things that strongly distinguishes me from others in the real estate business is my skill at listening to you as a person with unique needs and circumstances, and then matching you to a home that meets those needs. Please give me a call at 661-290-3750 and let's get started.