The real estate market is set to crash.
It’s going to be 2008 all over again – or worse.
The sky is falling.
It’s definitely not the time to buy/sell,
or even leave your house for the next five years if you can avoid it!
I’m sure you’ve heard all of these lately, since just about everyone – and especially the media - seems to be sensationalizing a possible real estate bubble burst. Whether it’s true or not (it’s not), it’s YOUR job as a Realtor or lender to share accurate information and context with your clients so they can make the best possible decisions.
But without your voice of reason, this public misperception will turn into fear, and fear into paralysis.
So, how can you turn the tide of housing market negativity?
Here are 10 data points that you can use each and every day on social media, while chatting over coffee, and in conversations and correspondence with your database.
Read them, understand them, and personalize or rephrase them to make them yours.
10 Points to bring up to combat market negativity:
1. The economy may be in for a downturn or even Recession (probably around 2020) but this time, it has little or nothing to do with the housing market – and there’s still plenty of opportunity for buyers and sellers. In fact, home ownership rates are near 30-year lows (around 64%) with plenty of room to rebound and members of the massive Millennial demographic are starting to buy en masse.
2. People need to live somewhere and people will always need to buy or sell. The system is not fundamentally broken at all (like it was circa 2008) so the seesaw probably will just tip from a seller's market to a buyer's market, or find a healthy balance within. In fact, experts predict more real estate transactions in 2019 than there were in 2018 or even 2017, which was a banner year!
3. The other alternative is renting. But in most markets, rents have increased just as fast (or faster!) than housing prices. With rent, you also don’t benefit from tax deductions and capital gain exclusions, future appreciation, and loan principal paydown, etc.
4. Mortgage rates are still excellent. Historically, they are extremely favorable. Likewise, banks and lenders seem to be making responsible underwriting decisions with lending parameters neither too tight nor too loose, and we aren’t plagued by 100% financing loans, adjustable rate loans, cash-out refinances, and options arms, etc.
5. The Fed has been raising interest rates, and mortgage rates have climbed from all-time lows (3%+) to just-plain-really-darn-good (5% range). It's crazy when people see that as a negative since it allows the market to let off a little steam, making sure it DOESN'T keep growing too fast, superheat, and explode.
6. Our homes aren’t underwater! In fact, “tap-able” equity (over 20%) is up 21% over the high point pre-recession, and an astounding 48% of U.S. houses have at least 50% equity!
7. There is still more demand than supply in most major markets, with new home building, urban in-fill, homes that fit senior and generational family housing, etc. being built. In fact, economists estimate that there is still a demand for 2 1/2 million houses to be built.
8. So, you’re going to invest in the stock market instead of real estate? Get ready for a roller coaster ride and A LOT of uncertainty that even the experts can’t predict.
9. Just a year or two ago, everyone wished for a more balanced market with slower price growth and more listings. Congrats. Now you have it. Enjoy!
10. This might be the most telling statistic: a recent survey polled 100+ of the most esteemed economists, analysts, and experts with this question:
Will housing prices go up over the next 5-year period?
94% said yes, prices would go up,
2% thought that prices would remain basically neutral,
And only 4% believed that prices would depreciate slightly.
That’s more than 9 out of every 10 unbiased experts predicting positive price growth – doesn’t sound like a housing crisis to me!
So go out there and help some buyers and sellers!