Have you ever read something and wondered, is this real? Timothy Ellis of the Seattle Bubble had exactly this reaction to a recent email he received. Quite frankly, Timothy wasn’t the only one astonished by what “Mr. F” had to say about the real estate bubble:
Regardless of what happens with the bubble the longer you wait to purchase a home the harder it will become. The only time I would agree that it would be appropriate to wait would be if you feel the bubble will burst and prices/values will fall.
Nothing in anyones crystal ball says anything about values falling in the Northwest, the primary reason being supply and demand. Here in (Mr. F’s) County our market is cooling. Even at that if we only have a 10% appreciation this year it is still great news for homeowners. So my recomendation would be to buy now not later. In not buying now you are loosing appreciation and tax writeoffs. As I tell most new buyers, just get on the up escalator! Once there at least what you currently own is appreciating at the same value as most of the homes around you so it will be easier when you are ready to sell and buy the next one.
If you ask me, this is a perfect example of a novice real estate agent believing his own hype; also a perfect indicator of the low barrier to entry in our industry nationwide. The best argument for buying “right now” is that prices are becoming more negotiable than they have been in about 7 years, and interest rates remain low. As far as the idea of real estate being a speculative investment, I am of the belief that it is a shelter first. History has proven that over time, it will appreciate, but history has also proven that people who buy at the peak of a market and are forced to sell in the short term can lose their shirts in the process (i.e. late 80’s-early 90’s). That said buyers are as savvy as they have ever been and to suggest “buy now” is insulting. I believe that they have the ability to weigh their own financial situation, including tax advantages and mortgage products, with their housing needs to determine if a purchase is a viable option.
Via Bubble Meter.