"Congratulations,
you sure showed them!"
That’s the
first line of a “mental letter” I have composed many times this year. It’s been “written” to many so-called buyers
who, over the past two years, have discarded my advice, once-in-a-lifetime
financing opportunities and overwhelming demographic evidence to die on the
hill called “looking backward”.
As I said,
you sure showed them.
You cannot
successfully use 2010 strategies in the market of 2013. You cannot tenaciously hang your hat on dated
comparable information (thanks, Zillow) and predatory buyer psychology when
inventory is down 70% from the peak and anything that shows well and is priced
within reason is almost immediately subject to multiple offers.
This is now
a forward-looking market. It was over
two years ago now when the giant ship finally turned and began sailing in the
right direction. Prices are not going
lower, they are going higher. Interest
rates are not going lower, they are going higher. Sellers are going to ask for more, not accept
less.
You had a
unique, incredible window of opportunity, and if you chose to overplay your
hand (as many did), you blew it.
Now the question
is, what happens if you wait another year?
Do you think affordability will be higher 12 months from now than it is
today? Do you think prices are coming
back down because banks made loans to people on homes that generally cost less
than replacement value who had sizeable down payments and excellent
credit?
I’m not
feeling that bubble-thingy you keep talking about… at least not yet.
As I’ve said
before, I’m going to judge this market by the quality of buyer in the front
seat of my car. As long as they have
large down payments, excellent credit and real jobs, this run has a ways to go.
But for
those of you who cannot change in the midst of changing circumstances, that’s
okay. You keep right on renting and
every month, you’ll be moving someone else (namely, your landlord) one step
closer to financial independence.
As I said,
you sure showed them.
