Jim Valentine: Confusion in the real estate media

Jim Valentine on real estate

Here we go again with another round of media hype about the real estate market.
Things have been stable for a long time with low interest rates, low inventories and high demand keeping the market priced strong. Shoppers adapted and made adjustments over time that allowed them to shop in this dynamic market. Sellers spent much of their time contemplating when to enter the market and wondering if they could achieve their replacement home goals without becoming homeless.
Interest rates have risen in recent months, but demand is still good. Prices are falling a bit, but not tumbling like they did in the last recession, which started in the fall of 2008. Sellers who have timed the market come to the market not wanting to miss the price hike and this appears to be pricing their properties at a market price rather than the grossly inflated pricing that so many have tried recently.
Now the media is starting to stir things up. There are stories about the current market and how it will change. Many media sectors are talking about another recession. You’re not very speculative about it; they seem very sure of it. When they talk about it, they are pushing the point when it comes to real estate. Along the way they talk about higher interest rates and the need to raise rates to fight inflation and how it all comes together to start a recession. Some are guessing how long we’ll be in a recession, and it seems like every single comment is steeped in negativity.
Some things that get overlooked are investors’ move to shift their money from stocks to real estate. This is one of those facets of the financial world that seems to periodically ebb and flow over the years as investors switch from one investment type to another in line with their respective changing markets.
Stocks have taken a hit of late, but real estate is holding its own. Investors looking at income real estate are seeing rents holding their ground near or at all-time highs. Tenants’ ability to replace their rent with purchase is somewhat hampered by higher interest rates, but interest rates are still very reasonable in the grand scheme of things, resulting in a rental and sale market that interacts and compensates each other well.
Real estate is once again the focus of the media. They bring in experts to talk about finance, real estate, inflation, investors and more. We find it interesting that there is so much pressure to create a negative image while shoppers are actively looking to make a purchase. Most buyers are now either cash or taking out a loan with the understanding that they will refinance in the near future, optimistically believing that rates will come down again in a few years. This mindset is no different than driving on vacation while gas is $5-7 a gallon because you want it. They want to own their own home and temporarily pay a little more for it so that they don’t lose too much time from their life plans.
The long recession that began in 2008 ushered in a time when many people had to put their life plans on hold. Major purchases, vacations and family celebrations were delayed. Things got better than normal for a while, then the COVID-19 virus took hold of their life plans and things were put on hold again. What we’re seeing now is a significant push back from people who are tired of procrastinating on their lives. Income increases, as do expenses. We can overcome this period of uncertainty and move forward happily and strongly, despite what the media is proclaiming.
Set your priorities, set goals, create the vision and take action. You will be amazed at how easy it is to buy or sell with a good experience, despite what the naysayers say it will happen to you. It is important that you achieve your real estate goals and enjoy the fruits of your planning and actions. Again: “These are the good old days!”
When it comes to selecting professionals to assist you with your real estate needs…experience is priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. [email protected]

About Paige McCarthy

Check Also

Shareholders of Wharf Real Estate Investment (HKG:1997) are in the red if they invested three years ago

Many investors define successful investing as consistently outperforming the market average. But it’s almost certain …