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It's Different This Time - 4/22/2020

Of course, it is!  We haven't experienced a global pandemic in our lifetime.  We haven't had an economic shutdown like this before.  Uncertainty is understandable and people tend to fear what they don't understand. With all that said, it doesn't mean there are not opportunities for people who can act in this unprecedented environment.

During the recent Great Recession, housing prices experienced dramatic reductions in value due to the subprime mortgage crisis.  Homeownership in the U.S. peaked in 2004 at 69.2% when lenders with questionable practices would approve almost anyone who applied for a mortgage. 

Since the Great Recession, Congress and the mortgage industry enacted significant rules that require a person to actually qualify based on the ability to pay back the loan, cash and savings necessary to close, the house securing the loan and sufficient credit history.

Both first-time buyers and investors were able to capitalize on opportunities during that recession by acquiring properties at below market prices.  These buyers had good credit, the necessary down payment, income and the willingness to act at the moment.  Interestingly, those prices did not stay depressed for long.

Today, there is a big part of America that has good credit, the necessary down payment and sufficient income to qualify but are in a wait and see posture.  It is understandable that both sellers and buyers across the country are uncertain whether now is a good time for them individually to make a move. 

Consumers should understand the difference in the ability to qualify for a home and the ability to afford and maintain it.  If a buyer is secure with their income and job status, a real estate market with less competition can definitely be an opportunity.

Currently, the homeownership rate is estimated at 65.1% based on the U.S. Census Bureau.  This is only slightly lower than its all-time high.

"The housing sector enters this current recession underbuilt rather than overbuilt" states Robert Dietz, chief economist with the National Association of Home Builders, "that means as the economy rebounds ... which it will at some stage ... housing is set to help lead the way out."  Ali Wolf, chief economist with Meyers Research, believes housing will be the hero this time "Last time housing led the recession.  This time it's poised to bring us out."

The majority of housing economists don't expect prices to fall because we're still experiencing a housing shortage.  Both existing homes on the market and new construction cannot meet the high demand from buyers, some who have been trying to buy and have lost bidding wars.

There is probably an equal number of sellers and buyers who are waiting to see what happens to the economy which will reduce the overall sales.  However, for the sellers who are in the market, their prices may stay solid based on the lack of inventory for the buyers who are staying in the market.

All real estate is local and each market, in its various price ranges have their own current characteristics.  If you would like to investigate how it might affect your decision to buy or sell, now or in the near future, we can arrange a video meeting.  We can provide you with current inventory levels in your area and price range, recent sales and current demand levels.

Manuel Martinez, MBA (c) 693.3064 Bilingual Real Estate Professional Keller Williams Greater Downtown Realty Chattanooga, TN (423) 693-3064 308905 My story: Every transition into a new home should be one of the most epic journeys in a person’s lifetime, whether buying selling, or investing! As someone who relocated from another country and grew up in a city with well over 20 million people, I can appreciate this journey as much as anyone. In fact, one of my most cherished memories as a child, was riding on a train to the Gulf of Mexico to explore my father’s hometown. The train ride brought me priceless encounters with not only new people, but also beautiful landscapes. Since traveling is one of my passions, I have enjoyed visiting an array of beautiful places around the world through various modes of transportation; however, there is something quite special and unique about a train ride. There’s a sense of nostalgia that comes from being surrounded by nature and the unique sounds of a locomotive. I have also found that the journey is as exciting as the destination. You’ll notice my logo incorporates a train; It pays homage to my home town in Chattanooga, Tennessee, the Chattanooga Choo Choo, and to the trains I loved riding as a child in Mexico. Moreover, it also signifies the journey of buying and selling a home. Like a train ride, this journey should be an epic adventure that involves reaching the final destination successfully, while enjoying every step of the way! My goal for my clients is to move along every twist and turn of their buying, selling, and investing journeys side by side, with ease and confidence. I strive to assure clients of my unwavering commitment to build meaningful relationships for years to come, and to consistently show that I have their best interest at heart. My business motto is, “build relationships, serve others and give back”. We can all enjoy the ride knowing that I am fully equipped to handle whatever comes our way because all of my expertise, experience, and education are at work for you when you sell, buy, and invest with me! Let’s write ✍️ your story! Manuel Martinez, MBA (o) 423.664.1900 (c) 423.693.3064 (e) manuelmartinez@kw.com Keller Williams Greater Downtown Realty Contact Me Visit my Website Send a Referral Subscribe to Newsletter