Real Estate
Just the other day I was talking with my friends of whom have connections within local industries or have family members that work locally, as I was trying to discover WHY! Why with the interest rates so low is no one taking the opportunities that currently exist on homes for sale? Why are Sellers hesitant to try to sell their homes right now? Why does everyone say the real estate market is gloom and doom? I figured since it perplexes me that I should find some answers and let you know what I’ve found out.
You may be curious as to what I mean about the low rates, so I’ll start with that. The Euro is very low right now which does help reflect on our market and since last Monday they have been talking about lowering the interest rates to about 4.5%! Not that rates of 6% or below is even considered to be a bad rate but 4.5% blew me out of the water. When I started in Real Estate over 8 years ago 8% on up was standard (and that was good compared to a couple years prior to that!).
There are several homes on the market right now that are way below appraised value and are below what people had paid for them only a year ago. 1904 Jonquil Lane is an example of this (click here to preview this home). However our local market has not been hit as other areas of the country have; we do not have a high foreclosure rate compared to even other areas of Wisconsin. Yes, foreclosures do exist but not in the numbers that everyone thinks. I want to stress this point because I have been contacted by many people about getting foreclosure deals only to their discovery that the “deals” aren’t even that great. The bank still desires to get their money back out of the property or Buyers discover that the house has been “trashed” and needs more repairs than they want to handle, thus the reduced dollar value for the property.
So getting back to “Why aren’t people buying then?”. What I’ve discovered is the fact that because economies are local, ours is finally seeing some after effects of layoffs occurring and some doors closing. Now the closings of a few retailers have been coming long before the “recession” (I use that term loosely) due to their expectations coming into our market or other competition beating them out. I do have information from my sources about layoffs and some seem pretty extensive, of course neither I nor anyone else can verify the length of such things.
This does affect whether people buy homes though; if you are worried that you may not have a job in 6 months then you don’t want to put yourself in the position of buying a new home. I get it! Yet if I were renting wouldn’t I be stuck in my rent and get in trouble if I didn’t pay? Sure I would, and yet rent rates have not gone down that I have ever seen; in fact I’m curious as to how much they’ve gone up in this last year. So if you rented wouldn’t this be a great time to consider buying? You could have equity in something, get an incredible rate and have the opportunity to buy homes that in the past might have been out of your price range. Hmmm quite the thought!
I guess when all is said and done; I do not believe that any market is bad. Oh! Those Sellers who want to wait until spring to sell; I understand that as well, but with the rates lowering there may be more people who can afford your home now more than ever in the past! I have also learned that negativity breeds negativity, so if we are ALL saying how bad things are, then it will get bad. Can’t we just pause a moment and think about how this time, this job, this market can create different opportunities? I hope we can and I put the challenge to you, I know I will!
May peace and joy fill you all this holiday season and all year long as our lives are journeys to explore!
Nanette Plano
Team Tappe Consultant
Keller Williams Integrity Realty
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