Nationally-recognized real estate expert and economist Karl “Chip” Case warned consumers to hold off on purchasing a property unless they can actually “afford” it, a report on CNNMoney stated.
"If you're not buying it for the long haul, don't buy because there's a good chance you'll have to sit through some down cycles. But when it goes, it's very nice," Case told CNNMoney.
67-year-old Case’s forecasts are based on recent homeownership data and surveys. According to him, consumer sentiment was weak recently as housing prices failed to recover.
"You've got much more negative vibrations in the housing surveys about homeownership than we ever had before," he told CNNMoney. "I think it's because people got hosed. They thought that housing prices will never go down. That's just bull -- you know what."
He also added that one “key metric” consumers should watch before making the biggest purchase of their lives is housing starts.
Housing starts data were “unbelievably regular" for the past fifty years, according to Case. "Every time it's gotten below a million in the past, it's come right back," Case noted. “Every time except the Great Recession.”
He also encouraged people to look at demand in the sector. He stated, “Will millennials actually purchase homes? Will foreign buyers keep coming?”
"The Chinese are coming over here with millions and billions of dollars, and they want to spend it on assets that tend to hold their value. And at least the theory is that housing does. But it is far from what it was in 2004," Case added.
US housing starts fell by 6.5 percent in May at a seasonally adjusted annual rate of 1,001,000, data from the Commerce Department showed, according to The Wall Street Journal.
The report stated that while the rate was below the revised April estimate of 1,071,000, it was 9.4 percent above the previous year’s rate of just 915,000.
New residential construction data for June are yet to be released next week.
At a time when inventories are building up, new marketing technologies could just be the shot in the arm the real estate industry needs to sustain its rebound.
For example, virtual tours like the one offered on RealBiz Media Group, Inc.’s (OTCQB: RBIZ) proprietary video platforms are effective in cutting down expenses on both the home buyer and seller’s side. The company’s Virtual Tour Program allows real estate practitioners to create mobile-optimized virtual tour videos and syndicate them for a cost of only $29.95 per month and $249.95 per year.
A George Washington University study revealed that adding a virtual tour on online listings lessens the expected marketing time by about 20 percent. It added that virtual tours also boost the sales price of a listing by about 2 percent.
Realtor.com data also showed that listings featuring a virtual tour of the property are clicked on 40 percent more than those lacking one.