Real Estate Investing

My friend and fellow Realtor told me this morning that he’s been working with a potential buyer for two years and she refuses to buy.  He found her a $225,000 all-brick gorgeous home that was on the market for $180,000.  She refused it. He has explained to her that interest rates are going up, so if she wants to buy at an inexpensive rate she should do so now.  Note: Interest rates actually went up a quarter percent yesterday, from 6.0% to 6.25%.  It looks like the rate increase is across the nation because my buyer just had their rate jump, just as it happened in California.

Meanwhile my friend’s possible buyer still won’t commit.  She says her dentist has told her, “Real estate hasn’t hit the bottom yet.” He advises her to keep waiting.

The buyer is taking real estate advice from her dentist, not from a Realtor who is quite aware of the housing market.  As my friend says,

I am confused by people that say they want to wait or the market to hit bottom. The reason for this confusion is that I spend many hours per week studying the Real Estate market and I can’t even tell when that will happen. I can tell when it is starting to happen and when it is over. With that said here is my advice we are in the best time in 25+ years for people to buy a home. 

I’ve commented before that we’re near the bottom.  Then I change my mind and think we have a ways to go thanks to articles like this on MSNBC.com which lists four reasons housing won’t recover quickly.

[Reason #4] There’s a bigger underlying inventory of homes for sale than you realize
We’re all aware of the number of homes available for sale from the homebuilders, and the Realtors’ association keeps us up to date on the pace and price of existing homes turnover, but those numbers don’t tell the whole story. How many of your friends or neighbors would list their homes in a New York minute if they thought there were any realistic prospect of a sale?

In other news, I saw Ed & Pam McMahon on Larry King last night and they are a class act. They said they made their foreclosure problems public to try to bring comfort and hope to the million other people in foreclosure.  They aren’t giving up and don’t want others to lose hope either.  Mr. McMahon said,

I wanted to, in a sense, speak for the million people you mentioned [facing foreclosure]. I heard that figure today and I just couldn’t believe it. Anyway, the million people that now have foreclosure signs on their house, or nearby. And I just want to give them hope, give them optimism, give them some kind of guidance. Get the best corrective people you need around you. Keep working on it. Don’t stop. There’s a lot of people that are hard workers, did everything right, didn’t do anything wrong, and all of a sudden, they’re in this boat. And I speak for all of them, as far as I’m concerned.

Finally, let’s welcome the weekend with some Friday dental humor.  Afterall, I’d much rather laugh and focus on good things than to let let bad news take over my head:

A guy goes to visit his grandmother and he brings his friend with him. While he’s talking to his grandmother, his friend starts eating the peanuts on the coffee table, and finishes them.

As they’re leaving, his friend says to his grandmother, “Thanks for the peanuts.”

She says, “Yeah, since I lost my dentures I can only suck the chocolate off ‘em.”