Unless you are quite observant or are in the investment real estate business, you may not have noticed one particular colossal shift in the housing market that has taken place in the last 5 years. Intuitively, the American public senses major changes, particularly if they have tried to sell or buy a home recently. But, here is the disturbing truth about what has happened.
HOME OWNERSHIP AS WE HAVE KNOWN IT FOR THE PAST 50 YEARS IS ENDING. Like it or not, the traditional old concept of the Great American Dream no longer applies. As practical home ownership becomes ever more difficult, people are choosing to rent.
The bottom line is that the realities of the US economy have forced us to become much more practical in our real estate decisions. Because of the unpredictable nature of the real estate markets, buying a home is much more tricky than ever before. Lenders are struggling to comply with unreasonable and cumbersome government regulation. Because those massive regulatory systems come with very stiff penalties, lenders are basically running scared. They are being so overly cautious that the average household has a very difficult time obtaining a home loan.
Investors, on the other hand, who are paying cash for homes to rent, do not need to deal with lenders. Landlords are now finding very qualified renters who would, in the past, be home owners. But the reality of extreme market shifts and lender restrictions make it very unattractive for them to buy again. The result is past home owners are now renting, maybe permanently. Consequently an ever growing segment of the population is choosing to be tenants rather than owners. Think Europe.
So, the bottom line is, be very careful when you are buying or selling your home. Know what you are doing. Work only with seasoned real estate professionals. Make your selling and buying decisions with your long term objectives in mind. AND, most of all, don’t assume that home ownership is the only way to go. Sounds funny coming from a real estate professional. But what my clients need is honesty not promotion – reality not hype – facts not advertisements.
Call if you have questions.
Hunter Stuart — Your AZ Real Estate Guy