Happy 4th of July everyone! Hope you all have a terrific “Independence Day” with family & friends. Good thing we won against the British otherwise we would be working today instead of grilling hamburgers, hot dogs, marshmallows and watching fireworks!
Several weeks ago, if you recall, I tried to grab your attention with a perfectly genuine question: if you financially can buy real estate today, what exactly are you waiting for? I mean, all the good reasons why you should are lined up before our eyes and are so compelling that I am lost wondering.
Sales are good, don’t give me wrong, but not near as good as you would expect, especially in an election year when hunky-dory promises on both sides should fill the brain with exuberance and confidence. What’s happening?
I got part of the answer last week, listening to a BofA webinar on “Understanding Mass Affluent Buyers”. The idea was to discover what motivates well-to-do clients who make up the 28 million households with $50,000 to $250,000 in total investable assets.
The discussion points did provide good insight into the concerns of this elite segment of the population. Obviously, heavy on their mind is today’s economic climate. Going from one slide to another, you can almost feel the confusion among buyers and a longing need for clear answers.
According to the survey, the greatest financial concern of the mass affluent buyers is…the rising cost of healthcare! Immediately following is ensuring that their retirement assets will last a lifetime. Interestingly enough, we see the same picture among the young crowd of Gen Y (18 to 34 y. old).
It is not surprising that 57% of those buyers are now planning on retiring later, vs 42% in January of last year. Not surprising either is the fact that 42% say they are spending less, while 65% are saving more. Most are cutting back on day to day items.
The most fascinating part, from my point of view, was the leading answer to the million dollar question: What does the term ‘wealth” mean to you? (Before you scroll down to the next line, try to answer that same test question…). Here was the answer: Security! Yes, in 2012, wealth means “security”. So much for the drive, the ambition, the fever of success, the ecstasy of buying.
In a way, I understand the feeling. Things are not terrific. After all, as I was reading the other day in the WSJ, the typical American family’s net worth has declined 39% between 2007 and 2010. What do we do about it? Among other things, we blame Greece, Spain, Italy, Cyprus, Portugal, Ireland…(your choice). The “funny” thing is that when you go to Europe, you hear that the US is responsible for this mess….
Everything is relative. The naked truth is that we all better put our house in order instead of playing the convenient blaming game.
I hate gloom & doom. Granted, everything above is true. No reason to celebrate. But for Pete’s sake, let’s wake up and look at the glass half full. Doing nothing is probably the worst course of “action”. Dare to keep your head out of the sand and see the unbelievable opportunities that abound in this real estate market. Timing, Timing, Timing…It’s here; it’s now!
To be honest, I don’t think that prices are going to go noticeably higher. The only objective stimulus is foreign demand, which is hardly enough to cause inflation… The picture is what it is, and today, the ease of buying a home, the reasons for doing so, the benefits of putting property on the market now rather than wait for wildly hypothetical better times…all those reasons represent a flashing light that calls for action.