I have been working on my golf game (key word: working) in an effort to improve my scores and actually play up to my inflated ego. Never mind the fact that golf is difficult and I’ve developed enough bad habits to rival Charles Barkley.
The current real estate market resembles my game. It is much better on paper than it is in practice. That is not to say there are no highlights. Even I can hit a straight drive or two and sink an unlikely putt. Such shots are akin to the sales strength in high-end markets, which are thrilling to look at, even majestic, but they are rare and cannot themselves save the game or buoy a significant sector of the national economy.
And that is where we find ourselves at the moment. It remains a buyers’ market, and the buying public is quite aware of that fact. In some ways, the expectations of potential buyers are now as skewed as those of sellers during the boom, which saw many substandard homes—some more deserving of demolition than a downpayment—sell at prices that could in no way be justified. Yes, it could be argued that comps showed values rising, and the inflated prices were valid, but the truth is, they weren’t. The premise of ever-increasing home values proved unsustainable.
That said, many buyers continue to pursue silk purse quality at sow’s ear prices, which is hindering a housing recovery. Despite rapidly declining home prices (some national markets have fallen more than 50 percent), historically low interest rates and a pendulum favoring the supply side of the equation, home sales remain sluggish. Buyers should still pursue the best deal they can get, and make no mistake there are deals out there, but unrealistic expectations have many hunting for significant discounts on homes that need little or no improvement. This is an ideal time to buy, but common sense cannot be discarded as a result.
This time around, if you are buying a home, it is likely because you want to own a home more than an investment. Housing experts assert it will take decades—if ever—for home prices to rebound to recent highs. Much like golf, posting a low score is great, but the most satisfaction comes from recognizing situations and choosing the right shot.