02 Feb A Strong Job Market Is The X Factor For Real Estate Recovery
According to a recent SmartMoney.com article, there were a record one million foreclosures last year. Home prices are still falling and underwater properties are at a record high. As the article puts it, “everyone hates homes.”
Whether you’re a buyer or a seller, you hate the home asset class right now. You can’t get reasonable financing for a purchase or you can’t get a reasonable offer. So, does this feeling represent the optimal time to buy a home? The answer is yes if you share the view of investors like Warren Buffet who believe that you should buy when others are fearful. A major problem with this ideology is that the consumer view of homeownership has changed. Purchasing a home is still an investment but buyers today are focusing more on it being a suitable home for their specific desires.
This is where demand comes in, the single most important factor in a recovering housing market. More specifically, this is where a recovering job market is imperative. As the article mentions, there are several factors that are dictating the health of the housing market but the largest factor resides with unemployment. Consumers aren’t going to buy a home without a job and those with jobs will refrain because of a perceived lack of job security. Experts have varying opinions and predictions for the job market. Regardless of what happens, this will continue to be the “X” factor for a housing market comeback.
Investor purchases will not revitalize the market. It’s going to take the efforts of the buyers looking for a place to call home.