There are two phrases I hear over and over again these days: “When will the market rebound?” and “I’m going to wait until it does to sell/buy.”
Whenever I hear these words I always wish I had an answer to the first, because it would also solve the last.
The trouble is, absolutely no one knows when the market will rebound.
I’ve recently been more optimistic about a recovery in light of the foothold I see traditional sellers gaining in the small multi-family sector.
However, yesterday an agent who works primarily with foreclosures told me he is managing over 100 properties for a single financial institution. These are foreclosed properties, sitting empty, and deliberately being withheld from the market by the lender.
If he has that many, how many more can there be?
If you look for housing rebound predicitons among economic prognosticators, you’ll see dates ranging from the fall of 2010 to some time in 2013 or 2014.
This would be in keeping with recent history. The Savings and Loan Crisis of the late 1980’s resulted in a real estate crash in many parts of the United States. And by most accounts, the recovery took from 1989 to 1995 or 1996. In other words, six or seven years.
Our present downturn began in the latter half of 2007. Which suggests 2013 or 2014 for a rebound.
It’s easy to think about waiting it out, with the hopes of recovering those equity dollars we thought we had. The trouble is, time won’t wait for any of us.
Countless potential sellers have told me they’re ready to downsize. Many more said they’ve managed income property for so many years that they’re ready to simplify.
On the other hand, buyers say they’re afraid prices will continue to decline, and they’ll have overpaid for a property that has already fallen in value by more than 20 percent. So they continue to rent, hoping for some magic signal that we’re at the bottom. And in the process, they pay their landlord’s mortgage rather than their own.
A lot can happen between now and then; illness, death, family additions, job losses and job opportunities. There are absolutely no guarantees in life.
Economic downturns offer us an opportunity to reasses what’s truly important. And while planning for our financial futures is certainly a priority, so too is quality of life.
If you’re wondering whether or not to sell, think about what your life will look like if it takes five more years for a recovery. How much will you have spent in extra utility bills? Will you be crowded? Over-extended?
If you’re wondering whether or not it’s time to buy, consider this: no one knew we were in a housing recovery in the early 1990’s until it had already happened. And by that time, it was already too late.
No matter what, remember — we’re all in this together.