Housing Data Wrapup: December 2010
I enjoy reading these reports from Wells, they are well thought out and their data collection is done very well. The opinions expressed by Wells, are collaborated by other sources that I read, further increasing the integrity of their opinion. If anyone out there has another data collection service that they enjoy, let me know.
I’m happy to share what I have.
Two things, in my opinion:
One, (Wells touched on it in the article) there will be a shortage of housing in the not to distant future. Right now, we have too many sellers and not enough buyers. The pendulum will swing and this time the market may swing harder to the sellers market than it ever has before. I predict that it will. Wait till 2013, then we can have a discussion about this.
Two: Energy Crisis, we are headed towards a pending energy crisis. The costs will be higher in the future than ever before. We have not entered any roadway that clearly averts this. Politically, it’s a nightmare. Realistically? When doing real estate, such as buying a home, just be prepared for costs to go up. So what can you do about it? Maybe buy a little smaller house, maybe don’t buy it too far from your place of work, maybe look at efficient heating systems, insulation potential, windows, LED lighting…maybe try to get it paid off so that you don’t have a mortgage…just be cognizant of the future and your position in it as costs rise.
This is the last of the great times to buy real estate. Once this chapter closes, you may never see it again in your lifetime. Time will tell, but we are entering a new phase in housing in America. With inventory high, rates low and prices suppressed, the Housing Affordability Index is at an all-time high. I haven’t seen it this high in 28 years. I wouldn’t expect to see it this high ever again. (I’ll do a piece on Housing Affordability Index tomorrow.)
Just remember to avoid following the masses if you want to profit; you buy when the masses are selling, you sell when the masses are buying. A simple rule.
Source: Wells Fargo Securities
