This past week our listings saw an average of 1.9 showings each. Traffic has not showed a significant slow down in the past couple of weeks, but it is still slower than anyone would like to see. As we head toward the end of the summer, it is seasonally common to slow down right before school starts, only to pickup again for a few months after Labor Day.
Over the past two weeks, there has been an over abundance of bad news in the media relating to our government and unemployment. It seems that everyone wants to try and predict what’s going to happen next. Recently, our government let a key decision stretch into the last minute over whether or not to raise the debt ceiling so that it could continue to pay the bills. The decision was made, but yesterday the ratings agency Standard and Poors downgraded the US Governments credit rating from AAA to AA+. The initial comments that I’ve read seem to indicate that investors are not overly concerned.
Nonetheless, the downgrade does and should signal a level of concern about the future of our country without some significant decision making inside Washington. It is concerning that the opinion of Standard and Poors is still regarded so highly even after the credit crisis, which was caused, in part, by their negligence. When securities instruments were created back in the mid 2000’s using sub-prime mortgages, the ratings agencies issued inappropriate ratings to those products giving a false sense of security to investors. Investors relied on the opinions of the ratings agencies and bought sub-prime mortgage bonds without truly understanding them. Only a few short years later, when people started defaulting on their mortgages as real estate prices fell, the whole system came crashing down. For more detail on this, I highly recommend checking out the book “The Big Short” by Michael Lewis.
I digress as this blog is about Charlotte Real Estate. But the truth is that what’s happened over the past week will undoubtedly have an impact on real estate sales. Consumer (and corporate) confidence in our economy will undoubtedly go down and employers will surely be hesitant to add jobs. Improving the unemployment situation in our area is one sure way to improve the housing market. It’s going to be hard for that to happen with all the bad news out there.
For sellers of real estate, this means it’s time to buckle down or get aggressive. At least for the next few months, I think we may see buying activity slow because of the lower consumer confidence. On the buying side, what a great opportunity to take advantage of!!
In previous blogs, I’ve written about how the rental market is sure to help the recovery of real estate sales. Our Charlotte real estate market has gotten to the point where it is now cheaper to buy than it is to rent in many parts of the city. Investors and homeowners alike are bound to catch on soon. Especially those with money that don’t know where to put it. Real estate could be a very good place to invest right now if decisions are made based on the fundamentals of cash flow.
Stay tuned to this blog….its going to be an interesting next couple of months.