There you go again.
OK, memory lane time. For you ‘older’ folks go back to 1980 and see if the words “There you go again” have any meaning to you. Need a reminder? Here.
Agreeing with Reagan or Carter is not the point of this post. I woke up to the news telling me we were in a “double dip” housing price catastrophe!! My first thought was “There you go again”.
Is it like it used to be where we had what seemed to be unstoppable appreciation on our homes? Have lots of folks had lots of trouble with selling houses, foreclosures and short sales? Is it a great buyers market with affordability being at an all time high? Are interest rates really good at less than 5%? Those answers are obvious but the point might not be.
The American economy is an anvil that has worn out many hammers and it will wear this one out too. I have been talking to lots of people and I have yet to find one that does not want to eat and sleep indoors. We sold about 5 million homes in this country last year and that is pretty healthy. I won’t kid you about prices as they have been falling but in our local market it is pretty stable. If you are waiting for ‘the bottom’ don’t ignore interest rates. It is much more likely they will go up 1% than house prices will do down 10% and the effect on the payment is about the same.
The news is spun to create fear and anxiousness so you will stay tuned through the commercials and generate revenue for the network. We are in a cycle in our economy that we have avoided for almost 20 years and the hit is significant but don’t let fear rule your world.
New housing starts are way down and we are selling foreclosure homes at a good clip. We will burn off this inventory and it won’t take long. There is a housing shortage coming. While prices won’t increase dramatically due to unemployment remaining high it will speed up the market and we will keep selling houses. Do you need a place to live? Of course you do. Housing is still a basic need and history shows we have enjoyed a 4% appreciation rate over the last 50 years. The bubble burst but we are just about back on that 4% curve right now.
If you have a job (over 90% do), rejoice. Spend less than you make and save. Pay your bills and decide if the time is right for you to buy in your own personal economy and don’t let the news freak you out. I hear that hammer on the anvil for now but I believe it is forging a stronger country and a stronger people who will leverage the challenges into the opportunity of the future.
Here is a remix of a speech Ronald Reagan gave about us. About Americans. I know not everyone agrees with him on lots of things but I think we can all agree on this message. Check it out.
Thanks for listening,
Jerry Robertson