Headlines, Statistics, Instincts and Anecdotes

I’m not an accountant, or statistician or bean counter. I’ve never been inclined to be any of them. I hold my own pretty well when talking and working with number crunchers, but I get no personal pleasure out of crunching numbers.

I’m about 10% pessimist. Yea, maybe the RJ is right. If they are, it’s going to be a great depression. Lots of us will become homeless or at least tenants again. Jobs will disappear. Belagio and MGM and Wynn will be having 29 dollar room sales on holiday weekends. Bridges will be collapsing and fires won’t get put out. Something tells me that that’s NOT how it’s going to go down.

I’m about 90% Optimist. I believe things in the mortgage and real estate industries will sort themselves out, and are already off to a good start in doing so. I’m yet to talk to ANYONE who’s lost their core fundamental belief that real estate ownership is good for them in the long run.

The monumental middle class, still believes that home ownership is a good thing. They know things run in cycles.

I know that homes are selling. The pace is the slowest in years, but homes are still selling. The number crunchers tell us so. I know that there’s some really shrewd people scooping up some REALLY good bargains, compared to 2005. I know there’s a lot of really crappy homes out there, and some that are anywhere from pretty to very nice, where the sellers are “in trouble”. Many of the buyers who are buying RIGHT NOW, are buying from those sellers.

I  know there are some sellers out there who are proud of their homes. They’re not in trouble. But they do want to sell now or fairly soon. They know this isn’t the best time for them to be selling. But they DO need that extra bedroom for grandma, for example. Or, they might be making more money, and want to score a great deal themselves in the next higher category of home. There’s over 60 people on my list who will buy in Vintage Vegas the second their home in the suburbs or Spokane, or New Jersey or New Whereever sells. They want a different home than the one they have. My Realtor friends that concentrate on the suburbs, or are generalists, have similar lists. But there are buyers out there who don’t want a crappy home. They’re buying from sellers the sellers who want to sell, and won’t “give it away”. These buyers have the BEST CHOICE and little competition for the best of the homes.

I’m getting calls and selling homes to first time home buyers. They can get a whole lot more for their money now.There’s intelligent, sane and affordable loan programs for them.  I’m getting calls and selling homes to investors and flippers, and landlords who are adding to or creating a real estate portfolio. Both groups who are buying NOW, have good enough credit, and some or a lot of money. It doesn’t take much money if your credit is good enough. Most people I’m talking to right now don’t know if their credit IS good enough, or how much money they DO need. Helping them figure it out is part of what we do.

But still NOT ONE PERSON I’ve ever talked to says “I’m never ever ever going to buy real estate. It’s a terrible thing to do and can only lead to poverty and misery.”

I’m not hearing (and I’m guilty myself) about the core fundamental reasons for owning real estate, and why they are still valid. No one’s reminding people about the tax savings and benefits. About Leverage. About Pride Of Ownership. About Fixing the costs of keeping a roof over your head. About having control over where you live, and how long you live there. About getting a paid off home by the time you stop working.  Since I brought them up, I think I’ll write some more on those topics another day.

There Is, however,  one group of people who haven’t started to show up yet.

I haven’t put together a deal in 2 years where the down payment was coming from dad and mom or grandma. Of course many dads and moms are still helping with college, or contributing to grandma every month, or struggling in their own lives. But there’s a whole lot of them that aren’t. The easy money days, where you didn’t need a down payment, or great credit are gone. That’s actually good news for the future.

We’re telling EVERYONE to start accumulating money if they want to buy property. We’re telling them to WORK ON THEIR CREDIT SCORES. And we’re telling everyone to start a dialog with mom and dad and grandma or Aunt Sophie. Find out if THEY’VE lost their fundamental core belief that their kids and grandkids will be better off being renters for the rest of their lives. Something tells me they’re willing to help if they get asked.

In PART 2, I’m going to tell you some of the stories I see going on around me. That’s the Anecdotal evidence referenced in the headlines.