J. Phillip Faranda, successful broker / owner from Briarcliff Manor, New York, is a thoughtful man with an interesting take on the nature of the shifting economic tide.
As the real estate market cycles into a recovery, talking heads are discussing what index will be the most accurate predictor of the 2014 market. Will it be new housing starts? Employment? The DOW?
I beg to differ. In 2014, we’ll be busier than any year since 2005 due in the largest part to one index they never talk about but is more compelling than any other:
Pent up demand from 5 and 6 years of putting off their lives will have more families out looking for a new nest than any year since I started my firm 8 years ago. It won’t matter if interests rise or fall, or if the economy is growing, or if the Middle East triples its tensions. People aren’t going to delay their lives, putting down roots, or going to new digs for growing the family any longer.
In 2007, when the first sub prime domino fell, millions of would-be home buyers transitioned overnight from irrational exuberance to incredible caution. By 2009, I saw dozens of examples in my own practice where perfectly qualified buyers held off on making a buying decision due to lack of confidence in the future (I know; don’t get me started. The future is happening no matter what).
But you can only live with your parents for so long.
There’s a limit to your tolerance of staying in that cramped apartment one more year.
Your wife will agree to hold off on having a baby for a finite period of time before she says “enough.”
People want to get their lives in gear.
No more waiting.
The public now understands that the sky isn’t falling, and that it is time to start living their lives again. No more delaying, no more putting off, no more waiting and seeing. The time is now. Millions of people who would have already otherwise acted in 2009, 2010, 2011, and 2012 are now ready-more than ready, eager- to put down roots.
Interest rates were 18% 20 or more years ago and people still bought a home because they wanted to participate in the American Dream. People have bought homes through past recessons, world wars, and other trying, challenging times. The Great Recession is over. “It is now our time” is a thought echoed by more people now than ever.
“She’s not waiting any longer” are words uttered to me in private by husbands quite a bit lately. Their wives want to start the family. It was OK to hold off a few years ago. But they aren’t delaying things anymore. The writing is on the wall, and the indices I am seeing aren’t published in the Wall Street Journal or Bloomberg.
More young families have had enough with waiting and are poised to act no matter what the circumstances.
By the first quarter of 2014 we’ll have over 40 dynamic licencees ready to serve their needs in acquiring a new home for the next chapter in our clients’ lives.
And believe me, nothing is going to get in the buyers’ way. It is time to stop waiting and start living.
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