I thought you may find interest in the article I’ve attached. A couple of things to note: When they speak of investment from HUD, they are talking on 2 different planes:
1. One, HUD reports out partially because housing is a large component (in typical years) of the investment side of our GDP. Since you don’t “use up” houses, and they typically gain in value, housing is calculated as an investment, where shoes, televisions, cars, and most other physical purchases are in the “consumption” bucket. So, it is monitored closely, as improvement in housing makes a big difference in our GDP
2. They are also in the last line of this report (which I’ve bolded and underlined for you), speaking of investors in the construction industry, as opposed to the guy who is talking to you about picking up a couple of specs for rental. This is huge, as it ties to our sales meeting a couple of weeks back. Again, I don’t perceive that we will see what is referred to as a “hockey stick” turn and subsequent growth, but it is refreshing to consider that most experts feel that pricing in stable submarkets will continue to creep upward. The attached graph, also from this article, compares what was assumed in 2009, which was an early 2011 bottom out, to the ACTUAL results on the dark blue line, which has seen some relative instability. However, “they” (Calculated Risk) now believe the index has bottomed out.
What’s this mean to you? Well, just as we have discussed – it should give you confidence when demanding your asking price on your next deal. It means, for many Americans, that their “seasoning” period post foreclosure or post short sale has ended, and they are ready to re-invest in housing, but probably more cautiously. It means for others, they have been waiting on the sidelines waiting for “bottom” to come in like a turkey vulture and get the deal when we are weakest – well, they may have waited too long, so you can apply pressure with some confidence. Finally, it may mean that with minor tick ups in employment, that some are confident enough finally to buy that house.
For you, just keep selling, and make sure that who you are in front of right now doesn’t miss the opportunity you are affording them, because someone else just might get it! Also, don’t kid yourselves into letting them go and thinking they will wander back in, because they just might find a sales professional somewhere else and take the deal. Follow the law of the harvest, and make hay while the sun shines.
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