Nothing Sugary About It

Home Sweet Home at Palmer Hill.

Accusations of brokers “sugar coating” the state of the market have been swirling through the Real Estate industry. Blame a rumored incident where two Manhattan brokerage firms allegedly advised their agents to keep mum about the market and to boycott The Real Deal for the mudslinging. You can learn the whole story at the famed blog Urban Diggs and while you are there feel free to support writer Noah Rosenblatt’s quest to “keep it real without bias” and “fight for transparency” http://www.urbandigs.com/2009/04/the_real_deal_tossed_for_not_s.html#comments. Whether or not the incident happened, or if it even matters at all, what’s worth discussing is that The Real Deal and Noah are correct – there is no excuse for sugarcoating the market or the trickery this implies.

Over the past few weeks I have spent a lot of time talking about why now is the time to buy – and I am not going to stop now. But, I do want to clarify. I personally believe that now is the time to buy for end users - people who are actually going to live in the home that they purchase - not flip, not rent out, live in their investment. But before we get to why to buy now, first let’s discuss buying in general and why despite the state of the market buying can still make sense for you. Think about your home this way – you are always going to be out of pocket for housing costs. Why not make those payments on something that gives you the potential to gain equity and could increase in value? It’s almost a no-brainer because you have to pay to live somewhere. Now that we are in agreement that buying is the way to go think about these three reasons why our current crappy, scary, slumping market is going to help you (maybe not the developers or the economic recovery – but you personally).

1. Falling prices are good news. Remember when real estate was hot? Everyone was buying and prices kept rising and rising until you couldn’t afford to live anywhere but your parent’s basement. Things are different now. The Wall Street Journal reported an alcove studio on the Upper East Side priced at $199,000 (http://online.wsj.com/article/SB123864151725581585.html) – when was the last time you could buy in Manhattan for $199,000?


2. Standing inventory is good news. Developers no longer have strict availabilities and restrict inventory release. You will not be told “no, you can’t have the home with the terrace – it hasn’t been released and when it is we don’t know what price it will be at - so please buy this smaller home with the partially blocked views.” Developers no longer have the luxury of holding on to the best homes to sell when prices are at their highest. This is your opportunity to pick the home that fits you best, with the best views, and the nicest closets, and that is just what you wanted at the price that you wanted (see point 1).


3. Interest Rate Cuts Are Good News. Interest rates were low before the recession and now they are headed even lower. Although the guidelines to qualify for loans are changing, well qualified buyers can still get loans and they can get them at amazing rates.
   

If these three reasons were not enough to get you thinking I would like to leave you with a question posed by our Regional Sales Manager – “Why is it that in a sellers market everyone buys but in a buyer’s market nobody buys? Tricky.