Many people wondered, or predicted, that the tax credit would just steal sales away from the future. That may very well have been the case though we can only hypothesize what would have happened if we didn’t have the tax credit, well, unless you are a politician.
I wasn’t a fan of the original tax credit and, besides the fraud, it looks like it didn’t spur a lot of sales that wouldn’t have happened anyway. I really wasn’t a fan of the extension either. With it ending in Spring I felt there was a good chance that it could kill our Summer. Though it is possible the tax credit which brought rates down even lower with less demand.
The latest news for real estate isn’t good which just drops confidence in a time when real estate doesn’t sell well anyway. The news likes to report bad news, “If it bleeds it leads,” is the line often quoted. The recent headline is that sales are down 27%, the largest drop in four decades and the weakest in 15 years. Great, while those are meaningless numbers it still scares the crap out of people.
So where are we? I, along with so many others are shocked at how low rates are.
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Truly historic levels and I don’t know when they will go back up. Last year or so Time Magazine suggested buying because they thought interest rates would go up. They made the point that a 1% rise in interest rates would counter any gain from a market being down 10%. As of today we are down a point and down about 10% in many areas.
My advice is always, if you have the money and you plan to live somewhere for 5-7 years than it’s probably worth the risk, but remember, it is a risk. The pendulum has swung from “Real estate is a no lose investment” to, well, you know. And lastly, you can’t make your decisions based on fear. I am bring you the numbers and perspective. Truly no one knows what is coming whether it’s good or bad, the market and the economy is it’s own beast. Just make thoughtful decisions.
