Great aritcle written by Lisa Udy!
Have you noticed the difference of today's home buyer compared to 5 years ago? Today's home buyers have changed and it's a great sign for the future. I can't talk about every market across the nation, but from what I have been seeing here, home buyers are getting smarter.
Remember back in the "hey days," when home buyers would buy a home and wouldn't think twice?
It went a little something like this:
"Can you show me that luxury home?" Said Mr. 2004 home buyer on a teachers salary.
"Sure I can show you that home, but I need to know if you can afford it." Said Mrs. 2004 real estate agent.
"Oh, it's not a problem, I have this loan where I can pay almost nothing for the first 5 years, and I know I will get a raise by then so it's all good." Said Mr 2004 home buyer on a teachers salary.
"Well, if that's how it's going to be, I would love to show you that home, do you have any money down?" Says Mrs. 2004 real estate agent.
"Money down? Na, I don't need money down. I have a loan that I only pay this fee to the lender, but it's all good, the fee is in the loan to. I don't need to worry about it though, because in five years I'll just sell the home and upgrade to a bigger mansion next to the lake. Home prices will always go up." Said Mr. 2004 home buyer on a 34k a year teachers salary.
"Yeah you're probably right, home prices will probably just go up, let's get you into that home!"Mrs. 2004 real estate agent.
This was an all to common scenario when buying a home was a "short term investment" rather then a home. Mr. home buyer would get a loan that he couldn't afford and Mrs. real estate agent would say let's get the deal done.
It was win - win.
Today's Home Buyer Is Getting Smarter...
I said home buyers are getting smarter these days. Does that mean home buyers back then were stupid? Not at all. Where they careless? Maybe. Were real estate agents part of the problem? Definitely. Can we blame the home buyer? Sure. Blame the banks? Seems a good fit. Blame the government? Of course, always blame the government.
So what makes today's home buyer smarter? Simple. Do you remember when you were a little kid and one day you thought you would try and stick a metal fork into the outlet to see where those little wholes went? What happened? You got zapped.
It's the same thing today with home buyers. No matter who's fault it was, the collapse of the real estate market was a wake up call to a lot of people. People got stung and many of them are still feeling the sting. It hurt, it hurts, and will continue to hurt until we wake up and take our forks out of the socket.
Home buyers on the fence? GOOD! Stay on the fence until you're sure you're ready.
Home buyers weighing risks? GREAT! Know the risks, calculate their effects on you long term, and make an educated decision.
Want more money down? EXCELLENT! I applaud you.
Not sure about job security? WAIT! Good for you.
Home buyers today are more reluctant, more calculating, and are becoming smarter. People got bit in this recession and they won'r forget for a very long time. People are thinking twice before putting their forks into those little holes and that is the only way we can move into the right direction in the future.
No matter what the government does to prop up the market or what REALTORS(R) say or how easy it is to get credit, home buyers are becoming smarter with their decisions.
So, Mr. and Mrs. 2010 home buyer, you make my job a little harder, you make your loan officers job a little harder, but you make our future brighter. Keep it up.