How's the market?
The chatter is all about the economy and the recession that looms ahead. This fascinates me, especially as to how it relates to the residential real estate business in NYC. Thank you to the University of Rochester for my degree in economics.
Looking into my crystal ball, I do see an economic correction on the horizon. The yield curve inversion, trade war with China, our ten years of economic growth and Brexit - need I say more? Political uncertainty and the upcoming presidential elections contribute to our anxiety. And when there is uncertainty and anxiety, people are likely to forego large purchases (homes) and investments.
On the other hand, record low interest rates, easy access to capital, lender stability and strong employment numbers lead me to be optimistic and believe that a recession, if and when it finally "arrives", will be shorter and have less impact on the real estate market than the Great Recession of 2007-2009.
We have already seen a correction in the real estate market locally. Fewer transactions, rising inventories, longer days on the market, increased negotiability and finally, reduced prices, all signify a strong buyer's market. Many expect prices to drop even further depending on inventory and supply. But prices may not drop for all properties. The best ones are often withdrawn from the market if and when there are signs of price declines. And although interest rates may be lowered during a recession, obtaining financing may be tougher as banks usually tighten lending standards.
Life goes on. Even in the worst of economic times, "The D's" of life changing events happen: diapers, diplomas, diamonds, divorce, downsizing, disease and death. Any of these are likely to trigger a need to move, regardless of what's happening economically.
Renting, the alternative to home ownership, seems crazy to me for most of my clients. Rents tend to rise during recessions as fewer people buy.
So, how's the market? Filled with opportunity.
Without sounding like every other real estate advisor recommending that buyers BUY NOW, let me simply say that buying now seems smart. Consult with your financial and tax advisors regarding your household's financial circumstances. Let's discuss the options and whether it makes sense to either trade up or trade down. At least consider buying a new home. Or an investment property. Prices have already come down, there are many choices and little buyer competition, there is ready access to cheap money, and buyers are able to negotiate an "insurance policy" in a low price in the event the market dips further.
These circumstances won't last forever. Carpe diem; seize the day!