| Did you know that each one of us is hypnotized every day? It is hard to believe that even the most skeptical independent thinking individual can be hypnotized. A typical example of this occurrence is driving your car. Once we learn the driving technique it becomes automatic behavior.
Without much thinking we know when to brake, shift, change lanes and so on. We arrive at our destination having thought about the activities head, appointments, meals, resolving problems, family issues, everything but a conscious effort to actually drive.
So it is with the continual bombardment of negative information regarding the housing market. The media has effectively hypnotized the public into a state of fear. Frozen with fear, consumers are afraid to make a move toward the purchase of a home. As a result, consumers are letting the best opportunities in years pass them by.
The majority of home owners that are caught up in the foreclosure crisis are consumers that should never have been given a loan in the first place. Recently, almost anyone that had a job and was breathing could get a loan. Many cases required no documentation, poor credit was accepted and no money down programs were available. Of course, some lenders would push that type of a loan to consumers. There are more consumers that fit this criterion rather than the 20% down, good credit and stable sufficient income group. Because of the amount of subprime loans, the media jumped on the story and hammered it into the psyche of the consumer. Well dressed authoritative national commentators go on television several times a day, day after day and call homebuyers essentially idiots. The Real Estate Industry is unable to effectively counter the massive negative message. Now, it is clear that consumers have a perception problem.
Media coverage of the housing slow down has been intense, but that is not the whole picture. Recent figures breaking down home price appreciation by states and metropolitan areas reveal the impact is not being felt evenly across the country and that some areas are seeing little effect.
The office of Federal Housing Enterprise Oversight, whose House Price Index (HPI) is the most reliable measure of house prices changes, reported that in the first quarter of 2007 prices nationally were 0.5% higher than in the fourth quarter of 2006 and 4.3% higher than the same quarter in 2006. Granted the appreciation was the slowest in ten years just when most homeowners and investors had become accustomed to the steady sizable appreciation in the value of their property. The slowing market gave credibility to negative media hype. The more consumers remain frozen; afraid to move forward with the sale or purchase of their home the more negative domino effect it has on our economy. As a result ,this behavior has helped to slow the economy.
The reality is that the current interest rates are the lowest they have been since 2002. Keep in mind low interest rates do not continue forever. The combination of record low rates, lower home prices and plentiful home selections make this the time to make your move. Bargains are abundant for first-time home buyers and investors. Buyers should be reaping the harvest of the best real estate opportunities in years! The only big problem with the Real Estate market is the consumer’s perception of it.
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