Buyer's Market; Why aren't people buying homes? (Atlanta, Alto: for sale, real estate)

[B Wagner]

With what is going on in the economy I can understand to an extent, but now is the time to buy a home. It is probably the best time in our lifetime to buy a personal home or start getting involved in investment homes.
The government is adding buyer incentives to help boost the market. Interest rates are as low as we will probably ever see again in our life time, and the market is flooded with homes for the picking, with selling homeowners motivated to sell. The “Perfect Storm” for a buyer.
I can understand people whose jobs are in jeopardy being hesitant, but what about all the people who are losing money in everything from 401K’s to the stock market, why aren’t more investor oriented people being aggressive in their portfolios?
There are a lot of people who this economy has not affected at all so far, but yet they haven’t done anything to help stimulate the economy.
The gloom and doom on the TV and all the talking heads that act like they have expert opinions on what is going on are looking at 4 or 5 markets in the whole USA and saying that everything is terrible. Yes, our economy is taking a big dive and people are cautious about their future investments, but now is the best time in our lifetime to invest in real estate. You have to be smart in what you are doing though. The cycle is down and in a lot of markets are starting on the upswing, but at the very beginning of this up swing.
If you are interested in putting your money into something that can take a quick turn around, I would recommend real estate. I see HUD homes, bank and corporate homes sell for $.50 / $.60 on the dollar, week after week. This is not taking into effect that in about a year or two the market will take a big upturn again and the equity factor will kick in and the investor will make a quick windfall in equity profits. Now is the time to buy if you have the means to do so. Cash is king right now in the market and I see many people racking up equity in homes and will be in great shape in the near future.
If you are waiting on the market the even out you have already missed the bottom and are just beginning to see the rise to the top and it is not too late to take advantage of the market, as it is today. Contact your local REALTOR® and get advice and see what the local trends are in the market. If you wait, you will miss one of the best investment opportunities in our lifetime.
I speak for the markets in the north Georgia area and particularly in the Atlanta metro area. Your particular area is actually subject to the trends in your area. Contact your local REALTOR® for the trends in sales in your area to see what might be in your best interest...Bill

[Bulldawgfan]

Even though this thread is basically an ad... I will nibble.
Despite the low interest rates, real estate is, for the most part, a long term investment. For the average run of the mill person we are talking a thirty year investment, fifteen years on the short end. I realize you are in the biz... but come on. After what has happened in the last year (with the economy) people are in survival mode. In my opinion, the only people that are really considering long term investments are people who are financially secure already. This is not a buyers market... it is an investors market. Again, in my opinion, a buyers market has to involve security... of which there is none. You called this a buyers market because

the market is flooded with homes for the picking

.
Why is that? Why is it that people are willing to selling low (as appose to selling high)? Why is now such a great buyers market? I though real estate was stable. I thought real estate was suppose to be good for both buyers and sellers (not just agents). Why are sellers cutting their losses? I think it is because people are freaked out about next week, next month and next year. Stability... or the lack there of. A buyers market is not just about availability, as you, someone in the business, claims. Long term investments are about security. A long term, low interest bond is guaranteed. What guarantee are you offering?
Just my $0.02.

[irishvanguard]

I think Bulldawgfan makes an important distinction. Markets don't just behave based on "high" or "low", "buy" or "sell" triggers. Markets are much more entangled with human psychology, which includes the rational and also the irrational. And the consideration of security---"what happens to my investment next month?....." is not irrational after all. It is indeed a very rational consideration.

A very real problem in this so-called buyer's market is the problem of liquidity. Fewer people have the cash to make the moves suggested by the O.P. And too much money moving into real estate away from the domestic stock markets would not be so good for the capitalization of the very companies we are employed with, would it?

[marmac]

-"and the investor will make a quick windfall on equity profits"-------

Yup, realtors never change their " spin".

Wasn't that the exact same thing realtors were proclaiming right before the housing bubble burst ?

Many realtors remind me of carny barkers.

If both were weathermen on tv, they would proclaim it's sunny while giving the forecast outside in a downpour under an umbrella.

[neil0311]

Originally Posted by irishvanguard

And the consideration of security---"what happens to my investment next month?....." is not irrational after all. It is indeed a very rational consideration.

What irishvanguard describes is a classic sign of a deflationary spiral. People wait to buy because they believe they can pay less if they wait, or that what they buy will lose value. The result is more decrease in price and the cycle continues all the way to the bottom. People concerned about the larger economy and their jobs also creates a situation where those who have cash won't part with it, no matter how cheap the houses may be.

We need to find a bottom in the housing market by stopping foreclosures, and then we need to get consumer confidence back up. I'm afraid that as long as we have rising unemployment, even low interest rates won't be enough to bring the huge number of folks sitting on the sidelines with cash, either in the housing or stock market. Once we see signs of recovery, one of the beneficial factors will be people with cash ready to dive into homes and stocks.

[B Wagner]

I can only speak for the Atlanta area when I talk about the market being on the come back, but there are other areas coming back also. Yes I am in the business, but that is not the only spin I have here.
In the north Georgia area a year ago there was 24 months worth of new home inventory. The local builders held up, many went out of business, but for what ever reason the inventory of new homes is about 3 to 4 months here now. This still leaves resale homes, which the inventories are still at 18 to 24 months inventory. Since the election it is like someone turned on a light switch and we have seen people to actually start to get out and look at homes. A lot of them battled all year with correcting their credit and are now ready to buy, some are still working on it, but will come out after the first of the year.
As the need for homes grows and buyers buy up this inventory of resale homes, the builders will need to start building homes again, some are in the planning now for the next few years, to start their business back up.
The credit debacle is what has fueled this for the last 18 months, with about 5 or 6 periods when people with good credit scores, just could not get loans. We just went through a bad period when the Feds came on TV and said the sky is falling.
I was reading BullDawgFan’s comment and actually people, no matter when it is, will always have to move due to relocation, divorce, loss of job, downsizing, foreclosure, etc. so houses will always be for sale. There are a lot of people who have lived in their homes for years and actually have equity and can take the 10% loss in their sale of their home, but to buy, there are some great buys right now. What is the big deal if you lose 10K on your home sale when you buy a bigger home with 20, 30 or 50K worth of equity upfront in your purchase?
Most people’s biggest investment is their home and you would not buy stocks while they are up in price, you buy while they are down in value.
The economy and home market was actually worse than now in the late 80’s with the Savings and Loan scandal; interest rates were higher and home values took a big dip and loans were almost impossible to get, but the market came back and it came back big in the 90’s and went through the roof in the mid-decade.
Real estate is and up and down market and it will be back. If you buy low now, you will get you money back later.

[Ollie1946]

People are NOT buying because of FEAR!

[Ollie1946]

People are not buying because of FEAR.

They should be afraid. The worst is yet to come.

[tablemtn]

If you are waiting on the market the even out you have already missed the bottom

Ha! The option ARM and alt-a mortgage resets don't peak until 2010/2011. I'd wait until after that to buy a house, if time is not of the essence.

[B Wagner]

Ha! The option ARM and alt-a mortgage resets don't peak until 2010/2011. I'd wait until after that to buy a house, if time is not of the essence.

In Georgia where I work, those loans were against the law. There is another round of ARM's due to reset in the spring of '09, but again those loans do not apply in Georgia.