By: Todd M. Schoenberger
The September Existing Home Sales report was released yesterday and the data was promising. It showed a month-over-month jump of 10% in sales; a hopeful sign that housing is moving in the right direction.
However, the year-over-year number detailed how sales are down 19%, which shouldn’t be the case considering the economy is supposedly in recovery mode.
The housing sector is in disarray, but many pundits with knowledge of the sector like to point out the reasons to buy—now. Would-be buyers hear things like super low interest rates, a “buyers” market, and free incentives, as the primary reasons to purchase real estate these days.
But, I say to those who paint this fantasyland picture, you’re dead wrong.
You’d be a fool to buy a home right now. First, and foremost, if you had to sell for any reason, the chances of you moving out fast are remote. Mobility is not an option when buying a home these days.
People that buy now should think that they’ll probably die in that home. The days of flipping or moving up from a starter home are not on the horizon. You have to think that if you buy, you will be in that property for decades.
Considering how short-sighted Americans are with their attention disorders, it’s hard to imagine many having the vision to describe where they’ll be in ten years, yet alone ten months.
Second, homes are a depreciating asset. You can’t find one economist or housing analyst that will tell you home prices will not drop over the next 12 to 24 months. Why buy something so important that you know will be less in value in only a year?
Third, maintenance costs. Heating oil is on the rise, and one only needs to drive into a filling station to see how retail gasoline is rising. Don’t think the same is going to happen to the oil that heats your home? Think again.
And, finally, the granddaddy of them all, property taxes. Due to state budget constraints, do you honestly think property taxes are going to drop any time soon? The states keep playing that BS game that there’s a three-year lag in dropping tax rates, by stating your property tax bill represents the value of your home before the bubble burst. Oh please! Do you really think homeowners are that stupid?!
UPCOMING TELEVISION APPEARANCES:
Tuesday, October 26th, on the Fox Business Network, 12:00 to 1:00pm, ET. See Todd M. Schoenberger, Live and in-studio, with notable Fox News anchor, Cheryl Casone. We’ll be discussing and debating topics regarding taxes, monetary policy and how the markets will perform for the remainder of 2010.
Hope you have an opportunity to tune-in!!
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