A media employee asked me a few weeks ago what I thought about the housing market and I said I thought it was a great time to buy a house. She replied “but not so great if you were a seller.” I asked her where she got that information and she said “I read it in the paper.”
And therein lies the problem. It’s no secret that sensationalism retains an audience. I have been selling homes here since 1988 and I cannot recall a time in the previous 20 years when there were so many “experts” in our local media. No wonder buyers are sitting on the fence or, worse yet, thinking that sellers must be desperate to sell. Even when the news is positive it gets relegated to the second paragraph of the article after the negative headlines.
In spite of what you read in the paper or hear on TV, 2007 was the fifth best year on record, nationally. The economic forecast from the experts who are hired to study real estate nationwide tell us we are likely to have a decline of about 1.7 percent in the national median price, but this is after a more than 50 percent rise in values during the recent boom. Why are we hearing about double-digit losses in a state like Florida that has no relevance to our area? Our weather page doesn’t say “Sunny today in Florida,” it tells us the weather in Puget Sound. So please tell us that in Snohomish County, overall values declined less than 1 percent through November 2007. We are very insulated in our region.
How fortunate we are in Snohomish County we have that perfect combination of a strong economy, low interest rates and an abundance of housing inventory. Real estate has always been one of the best investments you can make. We need to get back on the page of understanding what home ownership means to us. Besides the financial benefits of owning a house, there are many social benefits. Home ownership creates stability for owners. Home owners demonstrate higher income and educational attainment, higher civic participation, higher self-esteem from perceived self control and even better health conditions — so say the “experts” who are paid to research and forecast the market.
Here is one very good reason to buy a house if you can. Did you know that according to the Federal Reserve, between 1995 and 2004 the average renter accumulated $4,000 in wealth? In contrast, the average homeowner accumulated $184,400. Negative press that says the market is going to drop 10-20 percent in a year paralyzes buyers who want to buy but sit on the fence because they are fearful they will buy before it hits rock bottom. Wrong move. What’s likely to happen is that mortgage rates will go up. Sellers are going to price their homes to move on and those buyers who are trying to time the market are going to find the ship has left port without them. Right this minute we have the perfect match of lots of inventory and low interest rates and if you leave out the negative hype we see on TV and read in the paper, the buyers who truly want a place to live need to get off the fence.
My clients have seen a drastic increase in their home values over the last few years — much of it demand-driven. There was an article in a Seattle paper a few years ago that said if you don’t buy a home right now you may never be able to buy again. Many buyers had no business getting into homes they could not afford and investors fed the greed and we reached the tipping point last year. Sellers who already have realized appreciation anywhere from 40 percent to 100 percent, depending on how long they’ve had their house, need to forget last year and price their homes to sell and get on with their lives. The past is past.
I explained the reality of the market to one family this way: Selling a house is a little like having a baby. The delivery is painful, in the midst of it all you swear you’ll never go through it again, but then it’s over, you’re on your way to the rest of your life and you forget all the pain and someday do it again.
If you want to know what really is happening in the real estate market — ask a Realtor who is in the trenches every day to give you the facts of our market.
Barb Lamoureux owns Lamoureux Real Estate in Everett. Her e-mail address is Barb@LamoureuxHomes.com.
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