A professor once told me, “People are creatures of habit and cycle. If you know the habit you can predict the cycle, and if you know the cycle you can predict the habit.” That being said, the cycle I am used to seeing this time of year is a robust Spring real estate market followed by a lazy relaxing summer only to pick up again early fall. Even past years when the economy was sluggish by mid March buyers are shopping for homes and each week more and more sellers put their home on the market. The habit is to act quickly to get the right house, close by June, get the kids into a new neighborhood at the beginning of summer and meet new friends, and be ready to start at their new school by fall. That’s the normal cycle and habit.
This year is different. We need to look at the habit first and predict the next cycle. Buyers are not buying and sellers are not selling. People are out of work or hear they may lose their job. There is less money coming into the household, but expenses remain the same or increased. People are not spending.
In real estate this means buyers will negotiate an amazing price for their new home. Distressed homes will need to sell for even less to compete, home values may drop further, but as prices continue to drop eventually buyers will come out and take advantage of the “good deals.” As new buyers come out interest rates will go up.
The time to get into the market is when everyone else is out of the market. My advise, jump into real estate now and beat the next cycle. Do not follow the habits of everyone else. Do the opposite.
Equal Housing Lender.