When you boil down motivation down to its two basic components (stay with me on this for the sake of simplicity!) it’s either fear or love. Both emotions are powerful in their ability to form opinion on just about anything that we encounter in our world. We say, “we either love it or we hate it”. Not many times is there a middle ground, and when there is, it’s basically because we don’t like it because it doesn’t excite us or inspire us.
In the real estate world, these emotions are very evident and omnipresent; they don’t exactly look like fear and love on the outside, but we can say that its more fear and or confidence that drives our economic markets of the day. During the Great Recession of roughly 2007 – 2012, we saw an economic meltdown of epic proportions. Not since the Great Depression of 1929 was there such a downturn in all the markets including real estate.
I remember somewhere back in 2008 and 2009 where we saw around 60 months (yes, a full 5 years) of available inventory in real estate in Pierce County. What this meant was that at any given time if people completely stopped putting their homes on the market to sell, it would have taken 60 months (Yes, 5 years) to clear the inventory at the time. Well guess what? It happened! I know because we have been hovering around only 1 to 2 months of real estate inventory in Pierce County for about the last 2 full years. 2017 through 2019 we have almost no inventory to sell and it has made the housing market not only tough to navigate but has provided no base for affordable housing.
This wasn’t in every corner of Pierce County because let’s face it, real estate even then was still about location, location, and location, but many places saw vacant foreclosed homes all over their neighborhoods. It was an interesting time. And I say thankfully, that many don’t want to go back to where we were back then because we don’t want to own homes with negative equity. After all, this is America, and owning a home is one of the greatest achievements we enjoy above most every other country in the world. But 2007-2012 wasn’t that long ago and most of us remember what that time was like and we don’t want to go back.
So here we are heading into the 4th quarter of 2019 and I am starting to hear that word recession again. We have been going up so fast over the last 5 years or so that we are just destined for another real estate market crash, right????? I am not so sure.
If we were just to compare 2007 with 2019 and look at the economic indicators, they tell a very different picture. Unemployment is currently at record lows and mortgage interest rates which were supposed to be in the mid 6 percent area, are currently hovering around 4%. The housing inventory, based on a recent report by the NWMLS, displays around 1.5 months of inventory. Although we hear many news sources saying that we are headed to a recession, you must wonder how many of those crying that the sky is falling are doing it for political gain only.
So, what does all of this mean to us? It’s still a great time to buy and sell real estate. The fear “pundits” may be out in full force trying build a case for a recession going into an election year, but so far, all economic indicators still don’t support these claims. Even if we do head into an economic slowdown, it’s even a better time to buy real estate! Economics 101: buy low and sell high!
Look, everyone needs a place to live no matter the economic climate. Owning a home is still one of the very best “LONG TERM” ways to build wealth in our lives. Please give us a call at Jet Real Estate to discuss your real estate goals. Here are a couple of reasons to call us. You or someone you know:
- Would like to know the current value of your home.
- Want to know what you need to do to prepare your home for sale sometime in the future.
- Would like to downsize from your existing home to a smaller home or the other way around if your family is growing.
- Want to plan to buy a home for the first time in your life and you don’t know where to start.
- Would like to learn how to purchase investment property to build an investment portfolio with real estate as one of those vehicles.
Whatever your real estate plans for the future, give us an opportunity to win your business and trust.
All the best
Jim R Perry
Jet Real Estate