Would you so “no” to winning the lottery?

Sunset on the Hudson River - Sleepy Hollow NY
Fotos on the fly – Hudson River Sunset on the River Walk – Sleepy Hollow NY
December 12, 2011
Staging Decorating
From Old Listing to Sold Listing!!
December 15, 2011

Back in the 1980s there was  a commercial for NY State Lotto.  At then end of the commercial there was the tag line “But you’ve got to be in it to win it!”  Now, I’m not suggesting that we all go out and buy $50 worth of lottery tickets each week – but I do think the line “you’ve got to be in it to win it!” applies to real estate.

Now, If you bought at the height  of the boom, chances are you are hurting right now and would firmly believe  that anyone who would suggest that you go out there and buy real estate needs a lobotomy.

However, if you are a thinking of buying a home in Westchester NY – and you have the means to purchase – then CONGRATULATIONS!   you have won the real estate lottery!

Real estate is on SALE right now….

Prices are down from about 20-35% across lower Westchester.  That’s a SALE folks!    If this were a BMW, some Jimmy Choo shoes, a new flat screen or an iPad,  you would have everyone crawling all over each other like a re-run of  Black Friday.    With the low interest rates that we now enjoy, affordability is at highs not seen in over a generation.  Further, much  of the lower Westchester housing market is flat or increasing in price.  Pockets that are declining are pretty much bouncing along the bottom.  The big dramatic  downward moves  have morphed into very slow, slight declines, flat lines or a gentle increases.   The market is flat – not tanking.

The rental roller-coaster & sky-high rents….

The recession of 2008 gave renters and newly dislocated homeowners a temporary reprieve.  Many weren’t aware of what a roller coaster renting can be financially, but they are now finding out.  The reprieve is OVER as demand has soared creating a rental “bubble” similar to the housing bubble.

Our market experienced double digit increases in rental rates this year and there is no end in site.  Its nasty out there.  Long – time renters are now being dislocated. Kids are being yanked out of school systems.  Adults face longer and longer commutes as the high rates push them further and further away from places they’ve called home for years.  I’m not sure of much but I’m pretty sure that the rental situation will only get uglier.  To see how difficult this has become in some areas read the NYTimes article “In apartment hunt, looking isn’t free”.    It describes the situation in San Francisco – but it is not far from the reality in New York.

Purchasing does one thing renting can’t do. It stabilizes your outlay.  Certainly taxes will increase as will maintenance fees if you live in a condo or coop.  But, the biggest bite which is generally your mortgage, is stabilized to TODAY’S ABSURDLY-LOW interest rates.

Buy Low: Sell High!

If you follow the crowd you are unlikely to make significant gains.  Housing can be a bit like the stock market. .   When the main topic of conversation at every cocktail party becomes “How much did you make in the housing market this year?” and people are snapping up real estate like they are playing a game of Monopoly,  you should be running the other way.   But when housing is beaten to a pulp and people are talking about how “chic” it is to rent – that’s when getting into the game is a good idea.   Sadly, it is human nature to do just the opposite.   Greed drives us in at the wrong time and fear keeps us out at the right time.

Trying to catch “the bottom” of the market ensures that you will never catch it:

Until they invent  time machines, you will never know where the bottom of a market is until we are well past it.  By that time the market has morphed into a bull and the advantages of buying into a bear market are gone.    The best you can do is buy after a significant correction – or when housing is “on sale”.  If you catch the 20% off sale but miss the 25% off sale are you really losing out?  Not likely.  Eventually the market will recover and buying at 20% down is better than buying at 10% up because you waited too long to pull the trigger.

For example, the people who bought during the tax credit did not catch the bottom.  But, in my opinion, most of them did not “lose out”.  The bought after the big knife had fallen.  The declines since then (with the exception of a couple of niche markets) have not been compelling.  They caught the 20% sale, but missed the 25% sale.  However,  no one in that group was trying to “flip” a property.  They were in it for the long haul.  Further, they got an  $8000 tax credit to boot.  By the time these buyers sell – the market will have come back and they will have made a profit.   For a while it looked like that was the bottom!!!

Waiting is  gambling:

It always  seems that by waiting, we are not taking a chance…it just seems “safer.” But it isn’t.

Do you think prices will never go up?  Do you truly believe that  ridiculously low interest rates are here to stay?   Both will eventually move up – and affordability will go down.   People who are fence-sitting are gambling that both of the above factors will continue to move in their favor.  At this point that’s a pretty big risk.  The longer the downturn, the bigger the probability that buyers will miss the train.

There is one overriding upward pressure on housing prices already in the mix.  The sky-high rents are going to push qualified buyers into  purchasing sooner rather than later.   That will shift demand and prices will rise.   Its only a question of when not if.

“You’e got to be in it to win it!”

The question that I have been having for a flock of buyers who have been turning their noses up at what are truly incredible deals – is:  What are you waiting for?   The it’s chic to rent is soooooo 2008.   Right now you seem to be waiting until everyone is in a buying frenzy.   But the winning ticket is in the here and now.    It doesn’t get much better than this.  You have the opportunity to win the real estate lottery – but  you still have to be in it to win it!

© 2011 – Ruthmarie G. Hicks – https://thewestchesterview.com – All rights reserved.


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