By The data on the street points to lower demand for homes and increased supply throughout the end of the year. This is a recipe for market slowdown, for sure. But the news means different things to different people and entities.
Here is my take:
Home buyers: The best news is first. Buyers have it made right now. Interest rates are now at all-time lows. Not historic or near historic, but all-time lows.
And of course the higher inventory and lower demand in many markets gives the buyer more to choose from and more negotiating power simply because there is less competition from other buyers.
Bottom line for home buyers is that this news is good – excellent, in fact.
Home sellers: Simple math and physics tell us that when one side of a scale is up, the other side is down. Sellers may be on the down side of the equation here, but there is an upside. Fortunately, for the seller, this simple math can never account for the intangibles like an elite neighborhood, amazing schools, or the emotion that often is real estate.
Every sale needs just one buyer – the right one. When this occurs, the seller gets what he or she needs and moves on.
Bottom line for home sellers is that it may be tough, but definitely not impossible. If your location is coveted or your home has a lot of other appeal, there’s no need to fret.
The housing industry: Slowdown for the second half of the year, but not a halt. Be prepared for longer deals and more hurdles. These may be frustrating times, but many successful entrepreneurs are made in times of economic hardship. Be patient, work hard and don’t be afraid to innovate. Now is not the time to retreat.
Bottom line for the industry is that these slow times will weed out the weakest professionals.
Renters: Fewer home buyers can mean more renters so look for much more competition when you’re searching for your next rental. Rents may climb in some markets.
Bottom line for renters is that it may not be the best time to look for a new place. If you are financially and psychologically ready to become a homeowner, you might want to check out your buying options instead.
The economy: A slow housing market is not the greatest news for the economy as a whole. But the underlying factors causing the slow housing market are actually of more concern to the economy right now – slow job growth, massive deficit, deflation risks.
Bottom line is that the housing market will continue to be a topic of discussion in Washington. Look for more programs or program ideas to help tip the scales to faster growth.
To conclude, you see there are winners and losers in the low-demand, high-supply scenario. It’s all in how you see it. Opportunities are there for everyone.
