I read daily of the impending housing bubble burst on the coasts. But what about here in the heartland? Are we in danger of our homes becoming less valuable than they are? Or can we count on the continued steady upward climb?
Like everyone else, the following comments are just my opinion. But let’s break a few things down;
1. My phone is still ringing like crazy. It is true that a lot of the calls are marginal credit risk buyers. But somehow the market has not yet exhausted all of these buyers. And when these buyers buy, or new buyers that are just entering the home ownership market buy, they allow the other levels to move up or down, depending on their desires.
2. It is also true that while my phone is still ringing the inventory is still expanding. And let me just say that some sellers seem to have an inflated view of their property’s worth. Is it bad counsel by a REALTOR or their own expectations? Hard to say. But as we step deeper and deeper into a buyer’s market it is more important than ever to do your homework and price your house right!
3. Investors make up as much as 24% of the overall residential market. What will they do in 2006? My guess is most will hold and many more will continue to buy as the market gets softer and more opportunities are to be found. But if they quit buying and start dumping homes on the market, look out! (This is the greatest fear on the coasts.) In KC, I just don’t see any reason that I would advise my clients to do that.
4. Foreclosures are rising. Slowly but surely. All this easy financing has created a homeownership class of people just getting by. If their rates jump on their ARMs, or if little Susie gets hospitalized they may lose their home. Any neighborhood can withstand a foreclosure or two. But any more than that and it could seriously affect your home’s value. The Charlotte Observer has done an excellent series on this subject.
One of the great things about living hear in the Kansas City area is it’s economic predictability. Seldom do we get great jumps in growth. And seldom do we crash hard. I own investment property and see no reason to sell. The market’s value seems to be right on track here. And I’m staying in.