Tuesday, May 5, 2009

Another domino falling

Heather wrote a couple of weeks ago about the self-fulfilling prophecy of consumer confidence.  The media talks about the bottom of the market, consumers start to thing we're turning the corner, so they buy houses, the media reports housing sales are rising, consumers feel better about things, etc.  The process then repeats itself.

For the last 6 months, we've worked almost exclusively with investors, first-time buyers, and buyers moving here without houses to sell.

This week I've spoken with 2 families who are getting ready to move up.  They both bought their homes before the big price run-up, and are carrying fairly small mortgage payments.  Their homes are easily rentable for positive cash flow.

Both families believe this is their chance to buy a larger home at bargain-basement prices.  One wants a bank-owned 4-bedroom home; the other wants a higher-price home where he can force competing sellers to drop their prices significantly.  They'll both rent their current home out for a year or two, and then sell when the market is balanced and they aren't competing against foreclosures.

Did I just hear the next domino falling?

Your always loved dominos but never had the patience to set up a huge domino chain Realtor,

Chris Butterworth