Ignore the Headlines - finally the media gets it

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I came across an article recently that I would like to share with you. For so long the media has been pounding that the market is bad, horrible, stay away… Yes, things haven’t been as productive as they used to (for sellers). I have written many times about this market too. The media likes to to generalize the numbers for the most part. They quote the national averages and then point toward ground zero of the worse areas in the United States.

Let’s talk quickly about averages… You total the data and divide it by the number of data points and you have one number that represents the average. Example: 1, 7, 10, 2, 3, 9, and 10. The average is 6. So if each number represents a housing market, you have seven areas. Each area has a number to represent the condition (10 being the worse) The news media tends to focus on the areas with the numbers above the average (or the most affected areas.) You still have markets that are out performing the rest of the nation. So, when someone shows you averages, remember there’s always high numbers and low numbers. Which do you want to focus on?

Back to the article “Ignore the Headlines”...It talks about the economy, stock market, oil prices and the housing market. The part that really drew me in and something I can’t stress enough. Was the example that Jim Svinth, chief economist of Lending Tree, made about “waiting it out”

Consider a typical home that sells for $218,900. You put down 20% and get a 30-year fixed-rate mortgage at today’s rate of 5.5%. Monthly principal and interest come to $994.31. Let’s say that 12 months from now the same house goes for 10% less, or $197,010. But by then the recession is history and the Fed is jacking up rates to stem inflation. If mortgage costs rise a point, to 6.5%, your monthly payment would be $994.94 and you’d have saved nothing. Meanwhile, home prices might steady and sellers might become less willing to negotiate. And you have spent a year living someplace you’d rather not be.

This market is a moving target. Everything is pointing in the right direction for eager buyers. High inventory to choose from and low interest rates. The creative loans have gone to the wayside. If you qualify for a loan, you should feel secure in making the payments. Lenders have tightened their requirements (they had to.) Sellers are up against foreclosures and short sales that are impacting the values of their properties. Hold your ground…selling your home might not be the best thing to do right now.

We will climb out of this market…we always have. Real estate is a cyclic market…

If you liked that post, then try these...

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February 20, 2008 · Filed Under Buyer, Frederick MD Real Estate, Frederick Market Conditions, seller

Comments

6 Responses to “Ignore the Headlines - finally the media gets it”

Jack Boardman on February 22nd, 2008 4:42 am

Wow haverobert! I get to be the first commenter–now if only I had something profound to say in this comment.
I’m hearing from my close association to the RE market that some professional rehabbers (NOT the HGTV wannabes) are back, and testing the waters, a possible early sign that perhaps we’ve reached bottom here in Old Saint Paul. The demand for homes seems to be increasing, and for buyers who qualify for today’s home financing, this is probably a good time to buy. For sellers who originally purchased their house to be a home first, a place to LIVE, and an investment as secondary benefit, AND who have not fallen victim to the equity-as-a-bank account, now may be a good time to sell. The trick, I think, is to get those buyers & sellers together.
I purposely used a lot of adjectives and modifiers in this comment–because I really don’t know for certain if what I’m saying is certain…but I’m hoping.
Just sayin’
Scott on March 6th, 2008 2:27 pm

Nice Blog Bob. Nice article. My guess is the slow down is 60 to 70% media hype. But it will take several postive stories/post/articles to make up for one negative slant on the economy. Let’s keep trying to re-motivate buyers.

Scott’s last blog post..Fort Mill Voters Say Yes To School Bonds
gotbob on March 6th, 2008 7:46 pm

Thanks Scott for stopping by. When homes were selling like hot cakes, the Headlines never said “It’s a horrible time to buy, Prices are through the roof”
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