RealEstateEconomyWatch.com Insight and Intelligence on Residential Real Estate
A new national survey by Move, Inc, operator of Realtor.com, sheds some light on the two most powerful factors motivating buyers in this complicated market.
Those would be fear and opportunity.
Let’s start with fear. More than half of those who say they plan to buy home within the not five years are not in the market today, despite a drop of nearly one third in home values since 2006, record inventories, extraordinary bargains on distressed properties and the $8,000 tax credit for first-time buyers.
Why? Among potential buyers, the reason most cited (by 32 percent) was that they are holding off because they are concerned about remaining employed or being able to afford payments.
Many probably have good reason to worry. A majority of those worried about their jobs live in the Northeast (42.9 percent) and most fit the profile of many workers who are losing their jobs, making $20,000-40,000 (80 percent) and are 18 and 40 (88 percent)-a profile similar to many first-time home buyers.
On the other hand, the minority that is planning to buy is driven not so much by the tax credit for first-time buyers nor great selection of inventory as the foreclosure bargains.
These are sobering findings for policy-makers who know the housing recovery must begin with buyers. The traditional tactics to attract buyers, tactics that the government can influence or control like lower interest rates and tax credits, simply aren’t working with buyers, or at least not well enough to overcome their pervasive fear of unemployment and foreclosure. These times are simply too risky.
Only rock bottom, market wrenching prices on distressed properties are bringing out the braver buyers today and only enough of them to temporarily pump up home sales statistics. Real recovery awaits a new national mood of consumer confidence that’s strong enough to overcome fear and healthy enough not to need credits and massively expensive mortgage rate buy downs.
For more on the survey, go to
http://news.move.com/phoenix.zhtml?c=192403&p=irol-newsArticle&ID=1306173&highlight
