The capitalized part was the message boldly written on a billboard somewhere between Wauconda and Richmond, and it caught my attention as I drove home from the Saturday pool party gala. The sign emplored you to Buy Now, and be sure to ask the agent (I assume it was an agent) for the reasons. The reasons by the way, would all be the same- low rates, high inventory, first time home buyer credit, blah, blah, blah. Old news. Yes, it’d be a great idea for a first time home buyer to buy a home in the right market, of that there is little doubt. Yes, there are those on the pessimistic side that love to spew garbage about how housing is still over priced, how the banks are still predators, and how Realtors are thieves. I congratulate such people on a future where they’ll be confined by the rules of their landlord. Maybe if they’re lucky, the landlord will replace that rose colored carpet next year.
Yes, the buy now rhetoric continues, and it continues to some degree on this site, due in large part to the fact that I believe there are reasons to buy a home outside of the traditional. Check that, I believe the reasons to buy a home should be in part because of traditional views, instead of letting the purchase decision be influenced by monthly statistics and housing forecasts. The reasons to buy are indeed plentiful, as are the reasons to sit on the sidelines. This is the issue of our times, and while our market will most assuredly suffer the historical summer slump during July and August, the market is largely on the mend. The problem now is that the very statistics that encouraged people to buy or be left behind just a couple years ago, are now forcing a whole new segment of the market to sit and wait it out. The money is on the sidelines, and in some cases that’s a good thing, but in others, it’s a horrible idea.
I was out with a couple over the weekend looking at some condotels in the area. I’ve been getting wind of some pretty poor summer occupancy rates, and as a result, I found myself telling these buyers not to buy. Imagine the horror- a Realtor, telling someone not to buy! I told them that if they’re serious about getting a deal at a condotel they should wait until the potentially dismal summer proceeds checks show up in the owners mailboxes. The motivation will increase if the numbers won’t support the ownership, and prices will be cut as a result. The foreclosure issue has yet to touch the condotel market here, and perhaps some poor summer returns will force a unit or two into foreclosure only to be reborn as an REO property, only to be snatched up for a song by someone like my new client. That’s a prime example of when it’s time to wait, and I’m more than happy to point that out to you.
The issue is when the time comes to buy, and many buyers remain paralyzed by fear. I’m mostly talking about vacation home buyers now, rather than primary home buyers, because the animal is an entirely different species. The slow down of the vacation home market is the subject of considerable jubilation by many in this country, including Mr. Daniel Gross and Crain’s Lee Murphy. Mr. Murphy wrote an article yesterday that appears on chicagobusiness.com that raised my ire by attempting to blindly judge the Lake Geneva vacation home market by weighing Walworth County statistics. A lakefront home in Fontana, and a home on 5th Street in Delavan are not similar properties, that I assure you. Yet they’re treated as the same when writers look to sensationalize the softening of the vacation home market. There’s joy in writing about the misfortunes of the fortunate, and in that there is no secret.
The vacation home purchase should indeed be influenced by economic and demographic trends. There’s no reason for such a purchase to be excluded from those influential issues. Yet buyers find themselves stuck in panic mode, looking for the bottom, frightful of purchasing at anything but absolute bottom, which isn’t even remotely possible outside of a stroke of good luck. Bottoms will form, but they’ll only be identifiable long after they’ve occurred, at a time when noticing that bottom will be completely useless outside of a history text book. If you can buy, get out there and buy, but don’t just buy anything. There are deals to be had, but for every solid deal in this market there are 5 sucker deals. Pay attention, and you’ll be rewarded. If you’re broke, please don’t buy a home now. For those able to buy, remember that the best time to be rich is when everyone else is poor.