Yesterday's Wall Street Journal's real estate section had, as usual, a real estate critical piece about some NAR data being released.
The Wall Street Journal was the original biased newspaper, strongly criticizing anything that would compete with the good ole stock market.
The article discusses how National Association of Realtors numbers indicate a 30 year low with regards to people moving, and that people are just staying put too long. Instead of switching houses like undergarments, they're just staying too long in one place.
This provokes lots of thoughts for me, as I work every day in the world of helping people find their dream homes. I also own rental properties and know that my places aren't the Taj Mahal and that people will eventually move to find themselves something better.
Here are the top 6 areas where I think the WSJ writers have it wrong with regards to real estate:
1. Despite the clowns (lender and real estate data analyst) in the article don't seem to understand that the goal of every Realtor is to find their clients homes WORTH STAYING IN! Lots of home owners have gotten smart, and realized that it doesn't pay to be running around looking to buy up, unless they really need to move.
2. Since NEW CONSTRUCTION is lagging in units delivered since the great recession struck over 10 years ago, many of the new home builders have vanished, or have changed focus to building high value homes which are often times out of reach of the average home buyer looking to move up.
3. We still talk with home seller's that got stuck before the great recession in areas that may or may not be purely market driven which precludes their ability to buy until their financial situation is resolved. a. paying over market for homes in the 2003-2007 years. and b. 'cash out refinancing' or 'reverse mortgaging' their home far beyond its actual worth due to the unscrupulous practices of the lending and appraisal industry. Both problems were not market driven, yet their impact in many markets is still felt today, keeping people in thier over leveraged homes.
4. Our company has always focused on helping people MAXIMIZE THEIR HOME VALUE, so helping people put tasteful updates and market savvy additions helps them modernize their home, get more use out of it, and add value for when they do choose to sell.
5. Despite the notion that the authors choose to suggest, there's nothing wrong with the shift we've seen lately where inventory is tightening up. With all the factors previously mentioned, the fact that home values are rising is a good thing -- indicating the full recovery the housing market has experienced.
6. Cost. The authors don't mention anything at all about the cost to move. Instead they lament about people just staying put, not doing enough moving to get better jobs. That may be so, but I've watched people move in years past to get a better job in a market that costs more and take a loss on thier property to boot. Crazy! I'd like to think people are smarter today, and instead choosing where they want to be before chasing a job. Paying to move and sell the home takes a bitw of 5-10% of the homes value, if not more. If the home isn't marketed properly, or at the optimal time, it could be even greater.
All and all, the American homeowner should be commended for this entirely logical and rational trend. And lastly, if these journalists want insight on the real estate market, they need to find a Realtor!