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This article says that a majority of Americans think that this is not the right time to buy a house. Wonder what this is about?
Thoughts/questions:
- First time the figure has been below 50% since 1978! It reached a high of 80% in 2003-4.
- So, this survey was done at what would be considered the worst time so far to have to buy a house
- Even after the crash, the number didn’t get to below 50%. Why now? Things were really bad in 2007-2009. Why didn’t that time in the United States housing history cause the majority of Americans to say that it wasn’t a good time to buy a home then?
- Housing prices are still rising, but people are saying it is a bad time to buy.
- Are older adults typically more established with their current homeowner situation and therefore less likely to know or care about the current home buying marketplace? I think that is a plausible explanation.
- If most Americans believe that house prices will continue to increase, then why do they say that this is the worst time to buy a house? That seems to not make any sense. If you knew that house prices were going up, wouldn’t you want to take part in the price appreciation?
Is this a fear of buying at the top or near top? If so, then I could understand that. At the same time though, will the opinion of the American public shift when house prices start going down? Wouldn’t it be a great time to buy then? You would be getting a discount, no?
- Do you believe in behavioral economics? Are prices of homes going up because everyone believes that prices are going up? Similarly, when the majority of people believe that prices go down, will they actually go down?
- If the majority believe that real estate is the best long term investment, then it seems to follow that Wall Street will want to own homes. Isn’t that what we are seeing in most markets? I personally don’t think this is a good thing or that it will end well.
- Is this a confirmation of behavioral economics? Negative assessments leading to people moving out of the marketplace, leading to a slowdown in sales, leading to lower valuations?
- This survey does not appear to take into account the massive inflation in food and energy. If it did, would the opinions of ordinary Americans be even worse?
- As a real estate agent, I tell my current buyers that it’s ok if they need to buy a house right now. The market is hot, bidding wars are still intense, and there is plenty of traffic through listings. Proceed with caution though, and these are people who have to buy…they aren’t looking at a second home or anything like that. If I knew I was going to want to stay in a house for 5-7 years I wouldn’t give a house purchase in this market a negative thought.
We bought our house in 2007, and we had no intention of moving for a long time. Luckily, we’ve been able to stay in our home. The first few years might have been rough but we were in pretty good shape within that 5 year window, which allowed us to do some remodeling and not feel like we were throwing our money away.
- What are we to make of this survey? IF the survey goes above 50% again, should we consider that a good time to buy again? What if it goes lower? In some ways, if you own a house, you’re kind of insulated against this fluctuation of the marketplace.
Sources: https://news.gallup.com/poll/392330/record-low-say-good-time-buy-house.aspx
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