Thursday, April 12, 2012

What kind of idiot would buy a house right now?

The answer: a really smart one. The kind of idiot that’s bold enough to analyze the local economic trends and capitalize on a serious opportunity. The kind of idiot that, ten years from now, will host a beautiful dinner party in a home that’s already paid for, and shrug graciously when people ask, “How did you get this place for that price?” 

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I’ve been in real estate for over 28 years—that means I’ve seen two recessions and two bubbles. I thought I’d seen all of the buying conditions that could ever exist. But I’ve never seen anything like the market we have now in Texas. The stars are shining bright!

And before I start sounding like the queen of these aforementioned idiots, let’s just go into specifics. What are these stars I’m talking about, exactly? 

  1. Price: Everything about the market has stayed steady. There have been no huge appreciation jumps like we had in 2002-2007.
  2. Interest rates: This is a no-brainer. 3.7% is an unprecedented low.
  3. In-migration: People are moving into Texas, not leaving. 40% of all US jobs created are located in this one state.
  4. $100 oil: Whether you are for or against it, it’s becoming reality. This price spike means big things for oil companies.
  5. Minimal building: Getting a loan for new construction is still tough—you’re guilty until proven innocent—so building start-ups are staying extremely low.
  6. New normal: People are coming to understand that the economy has changed permanently. They’re taking stock of things and making moves.
  7. No equity lines of credit: Easy money always ends up being bad money. Because Texans were not able to access our home equity with an ATM card, foreclosures have stayed down and our real estate market has been relatively stable.
  8. Tax credit: Now, I do not believe that my tax dollars should supplement anyone’s home purchase. But this tax credit served as a sort of infomercial for young homebuyers who otherwise would not have entered the market.
  9. Rick Perry running for president: It was a free infomercial for the State of Texas not having a state income tax. Many people in other states did not know there were states that did not have a state income tax.
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Buying right now, in this market, may turn some heads—but in reality, it’s the smartest move you can make.  In two years you will paying a lot more.

1 comment:

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