Sentiment Trumps Interest Rates

 University of Michigan Consumer Sentiment Report

The experts do the reporting and I'm sharing their work. The data supports the evidence---regardless of the interest rates or home prices, how people feel about the present and the future have a lot to do with committing to spending commitments.

HouseHunt.com For 53562

The Middleton Zip code sales data provided by HouseHunt.com shows the average price dropping last summer as consumer sentiment declined. It takes more buyers to move the average price up above the median. As buyers moved to the sideline, regardless of cheap money and glut of houses to choose from, the average price dipped. Then as the confidence improved, people came back and the averages went up.

Part of The Solution.

Peter Zarov, attorney with Homestead Title, presents  an excellent Distressed Sale seminar in three hours. Saw it today. His manual is valuable. Peter is part of of the solution. Education reduces uncertainty and paves the way for consumers to get offers accepted and closed.
The high rate accepted offers failing to close is related a lack of understanding. Educating the service provider and the service receiver is part of the economic recovery solution.

Time to Buy or Sell Depends on You...not factors you can't control, such as interest rates and prices

About 1.63 million search results show up on Google for "Best time to buy a home". That is exactly the number of times real estate leaders have said, "Now is the best time EVER to buy a house" ....each year for the past 10 years.  Really, it's not much of a stretch; we Realtors have never seen an economy that wasn't "the right time" to  buy and sell real estate. We've taken optimism to a new level.

I don't have all of the answers, but I do have some questions: If "now is the time to buy", because rates are low and prices have dipped, how can can it also be the time to sell? Especially if "real estate prices are coming back", it can't possibly be time to sell. The time to sell must be coming, but how can it be today?

If I tell people to buy now because this economy is the perfect storm of low rates, lower prices, and high inventory, what should I tell the people who miss the boat when rates rise? I've seen people who missed a boat and they're kind of bummed.

Maybe another way to look at opportunity is to take factors we don't control out of the equation. Things like prices and interest rates have a way of going up, down, sideways, regardless of what I do. What I can control to some reasonable extent is my savings, my employment, my credit score, my debt, and my knowledge about housing options and housing costs. If I focus on saving $40,000, boosting my credit score over 700, and eliminating my debt, I will have 20% to put down on a $200,000 purchase, I'll qualify for the best interest rate available, and I'll still be able to save for home upgrades and improvements that keep my home's value from dropping too far south in the next economic dip. When we jump to own because we want an interest rate and what looks like a low price we over extend, waste money on worthless expenses like primary mortgage insurance, and end up with houses that own us.

Responsible people in the real estate and lending fields  may turn some business away because they know it makes a difference to be part of the economic solution. America does not need more unqualified home owners. America will benefit from a more aware real estate consumer whether they are renting or owning. A wise renter saving and building their credit score and financial position will be a powerful home owner...when they are ready.

Home owners who wait to sell when prices go up will be wise to take action on modernizing their homes today. The fixtures that were in style in 1997 can be replaced today along with the flooring, and bathroom fixtures. Who knows when or if home prices will move north? But if you are waiting for the day when your home is worth more than you owe, you might as well live in a better looking environment today.

Life Beyond Equity

Knowing what matters and preparing accordingly will change your experience from frustration to exhilaration. Recent trips into neighborhoods with buyers I found owners who bought at the peak of the market (at prices $300,000 +) selling today for 15% less. Out of a pool of nine comparable homes from Middleton to Verona we found four with fresh accepted offers. None were short sales or bank owned properties. Each has a home owner who priced wisely.

Buyers who are pre-approved and have taken time to study the market, and focus on owning a home as opposed to an investment, are coming through the experience satisfied. Sellers who focus on the big picture are equally satisfied. There is life beyond equity.

A buyer's market exists where seller's expectations do not align with reality. Within a buyer's market, one seller can change the tide to their favor by paying attention to condition and price. (Location is locked when you bought so look to price and condition to change the impact of location.) Get the price right as supported by evidence and pull the house into tip top shape and you're going to create some excitement. We are seeing seller's markets pop up all over. These markets are small and fleeting.