People Still WANT To Buy Homes!

A comment from a member of the public on one of my previous posts (News Flash - Real Estate Values To Rise)called into question my belief that it's not the housing markets that are broken, but rather the credit markets that are causing the housing markets to suffer.

In his comment the gentleman pointed out that there is over a one year supply of homes on the market here in St. Louis and the surrounding areas and that the number of foreclosures and auctions are higher than they've ever been. To this, I have to say that I agree with him. There are a lot of homes on the market right now and foreclosures are a problem.

That's not to say that people don't want to buy homes. They do! In the past week, I've gotten several telephone calls from people asking when I thought the real estate market was going to bottom out. A friend of mine called and mentioned a home that is across the road from his uncle's place that he wants to take a look at. The daughter of a friend of a different friend called me and asked if I thought that now was a good time for her and her new husband to think about buying a home.

These folks watch tv. They know that the real estate markets have been sucking wind for a while now, but that doesn't stop them from WANTING to own their own home!

Are they going to pull the trigger right now? I kind of doubt it. My buddy who wants to look at the place across the road from his uncle's also said that while he wants to look at it, that he doesn't want to make an offer until the price drops another $10,000 or $20,000. When I see him, I plan on smacking him upside his head!

My friend's daughter is still a bit nervous that if she buys something that it will be worth less next year than it is right now. I was honest with her, she might be right! I also pointed out to her that she should be looking at buying a home as a long term investment, not something to look at over just a 12 month period. NEWS FLASH - This is the way that real estate investments SHOULD be looked at!

Anyway, I don't know when this market is going to bottom out. I think that a lot of it depends upon if our government takes direct, proactive steps to address the problems in the credit markets. If they do, I think that a recovery in the real estate markets, even those worst hit, will actually happen fairly quickly. As I mentioned, I still think that people WANT to buy homes.

If the government either won't or can't come up with some solutions to the credit market's problems, then it might be a fairly long time before the housing markets recover.

Does this mean that my buddy should continue waiting for that price to fall or that my friend's daughter should hold off indefinitely from buying that first home? I don't think so. I think that they both should look at buying real estate right now as a long term investment. One that might take 5 or even 7 years to bear fruit.

People kind of got away from looking at buying a home this way. That's okay because even when people do start to accept the fact that the hold time on a real estate investment is going to be as long as 5 or 7 years, they are still going to WANT to own their home! This is the base for real estate. It's a base that we can build upon!

R.B. "Bob" Mitchell

ValueList Real Estate Services, Inc.

Bob Mitchell is president of ValueList Real Estate Services, St. Louis' largest discount/full-service real estate and mortgage company. If you would like to find out more about Bob, ValueList or our flat-fee listing program, please feel free to visit our web site at valuelistre.com