A Media-Driven Housing Slump...?
A: Yes. Please note the date of this post, should you happen to read this after I wrote it. Usually, the first phase of a correction in a booming investment sector (such as housing) is a psychological one driven by media coverage. Notice a trend?
Im going to go out on a limb here and declare that the current slump in NYC real estate prices has A LOT to do with the media. Im not blaming the media, nor am I looking for any distractions to try to sway public opinion. Rather, I am simply pointing out that there has been a plethora (thank you, El Guapo) of 'frightening news' being written both online and in print media outlets, causing a psychological reaction to would be home buyers (Scaring them away).
I speak this way after earning a BS in Psychology from Union College, and having experienced first hand the most devastating stock market decline in recent history (while being a NASDAQ Equities trader from 1998-2003). I can't help but think back and realize that people are still not over the pain of that stock market crash. There are a lot of people that are comparing this recent housing boom to that of the dot com boom, and therefore are awaiting the crash. So, I can imagine how many first time would be homeowners out there are holding off purchasing simply because of the media attack on NYC housing, which is reminding them of the pain that so many experienced from the recent stock market crash.
That is what I think is going on RIGHT NOW, in the NYC housing market. Buyers are holding-off! Existing listings are staying on the market longer, and sellers are quickly lowering their prices in an effort to bring back the crowds to their open houses. How low do you go? No one knows!
Sooner or later, the media will have outstayed their welcome, as housing market bust articles go out of fashion. You'll start to see a stabilization in housing prices, maybe even a minor tick up, and then all of sudden, buyers will have fewer reasons to 'hold-off'.
Try to look at real estate from the point of view of 'looking forward', rather than look at outdated statistics or housing bust articles because rates just went up. We all know that already. But what is happening in the future? I'll tell you this:
The price of Crude Oil has dropped sharply in the past 6 weeks, the US dollar has continued its strong rise, Natural Gas prices have stabilized, & Gasoline prices have dropped. When Bernanke takes over the helm at the Fed, he will probably see inflation as less of a threat, and PAUSE raising rates. What will the outlook be on housing if this happens? Thats right, POSITIVE!
Speculators & Weak Homeowners WATCH OUT, as serious buyers are waiting for you to be forced to sell at a discount!
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