Buyer's Market Arrogance

I remember Top Gun. Where Sundown, Goose's replacement, is in with Maverick and they're going against Viper. Viper sets Maverick up with an easy shot. Cake, pure cake. And Maverick says, "It doesn't look good."

Sundown, not paralyzed by the loss of Goose says, "What do you mean it doesn't look good? It doesn't get to look any better than that!"

And so is the housing market.

Buyers, much as I have been on your side and advocating this is a buyers market, you are goofing up big time. Wake the ef up and quit being so God damned arrogant.

I don't know how many times I've seen buyers come into the market and have the unrealistic expectations that housing is just going to be given to them for free. Matter of fact, not just free, but the seller is going to pay them to take their house. Furthermore, I don't know how many friends of mine I've said, "Hey, have you gotten pre-approved? Now is the time to start looking." only to have them say, "Well, I don't know, you know. I mean housing is on the way down, I think if I wait a while longer I might get a good deal."

The only problem is in "a while longer" there may not be such great deals.

Led by a media blitz that the housing market is in dire straights, buyers have been led to believe to postpone their purchasing decision indefinitely. Only problem is indefinitely means you'll pass up on what is arguably going to be the greatest time in your life to buy property. Prices are on the way down, interest rates are still at a historic low, debt servicing costs relative to potential rents are reasonable, but oh no, we're not going to buy. We're going to wait until the market tanks even more.

Now, I've always insisted that prices are going to go down (which I still opine they will). But what I've seen based on anecdotal stories and some incidental research is that not only are buyers passing up on discounted prices, but they're passing up on prices where they actually cash flow. Where if you rented out the property, your rental income would cover the mortgage, insurance, utilities and taxes. In other words, buyers have unrealistic expectations and are going to wait too long.

So here is my humble advice to all you aspiring junior, deputy, official or otherwise economists;

Don't let this opportunity pass you up.

Yes, there is a glut of housing, but based on housing starts, they're cutting back production drastically. Which means that once this excess inventory is eaten through, you'll be back to a balance market, and I surmise rather quickly. Yes, yes, I've insisted that the market has a ways to go, which it does, but buyers have become so loth to pull the trigger I fear they'll NEVER pull the trigger until it is too late.

So for me, for yourself, for the sanctity and holiness of capitalism, do yourself a favor and at least get pre-approved for a loan and be on the hunt, be on the look out. It is an opportunity, especially for those of you aspiring economists that are younger that may not present itself again.

All that being said, I could be completely wrong, you could lose everything, markets are inherently risky, you are a fool to listen to my advice, blah blah blah and all the other legal mumbo jumbo that alleviates me of any responsibility of you investment decisions.