By Alicia Lanier, REALTOR
As mentioned here before, in anyone’s book, this has been a very challenging year. But there are some silver linings peeking out behind the clouds.
Joe Brown, president of our Coldwell Banker Silicon Valley, is one of the most upbeat guys I know. Possibly because he’s been in residential real estate for several decades, certainly long enough to know that bad housing markets are always a prelude to another good market.
Like many of us, Joe has been keeping one eye on CNN and CNBC these past weeks to keep tabs on the minute-by-minute change in the economic crisis and the free fall in the stock markets. He has this to say:
“During times of economic crisis, consumers tend to invest their money in tangible assets, like real estate. We expect that this may be the case in the months ahead as consumers look to buy homes for all of the lifestyle reasons that prompt people to buy (i.e. marriage, births, divorce, deaths, retirement, etc.) but also with a consideration of the historic long-term appreciation that makes homeownership a valuable investment over time.
Earlier this week, Bloomberg.com reported, ‘Rates are low enough that some consumers stung by losses in their portfolios may want to pull the trigger on a purchase or refinance if they can lower their payments.’
Indicative of this fact, the article went on to report, ‘A nationwide survey of consumer credit rates showed 30-year fixed rate mortgages averaged 5.8 percent yesterday, according to Bankrate.com. Rates were 6.26 percent on August 29 and also July 31, in the same survey. Home-loan applications rose 2.2 percent last week, according to the Mortgage Bankers Association and purchases were at a six-year low the previous week.’
We certainly are in a time of uncertainty. But while so many of us sit glued to CNN and our investment portfolios, the housing market labors on. Because the beautiful thing about real estate is that it’s not just an investment—though it may be one of the most important investments a consumer will make in his/her lifetime. Your home is where you raise your family and plant your roots. It’s where you hang your hat and make memories to last a lifetime. “
My memo to all: Housing kept our U.S. economy robust after the tragedy of 9/11 sent shockwaves through the financial markets … it can lead the way again. In fact, I would bet on it … I’m already getting calls from clients who have kept their extra cash in conservative investments, have strong credit scores, and know Silicon Valley real estate is historically a great long-term investment.
Alicia Lanier is a REALTOR, e-PRO, and member of the Coldwell Banker Sterling Society which places her among the top 11% of agents internationally Contact her at Alicia.Lanier@cbnorcal.com or 408-491-1634