Most buyers are aware of the fact that good news can have an adverse impact on their ability to get a great “deal” on a home. The same news that may reassure buyers that it’s time to move forward with a purchase, can reinforce seller’s belief that a recovery is just around the corner. This hope makes it less likely that Sellers will negotiate their price aggressively.
Here are a few economic developments that can lead to a recover and price increases.
- Real Estate Prices– Once data is released for the first half of 2011, evidence will point to a recovery in major markets that were most affected by the housing bubble. Recent activity in all Florida Markets, points to a significant recovery well under way in the state. Inventory levels are down, Sales are up, and in many cases prices are up 6%-8%, already this year.
- Stock Market– The DJIA, or Dow Jones is near a high for the year, closing last week at 12,681. It is already up 7% so far this year, with additional increases expected.
- Corporations– According to David Kovacs, Chief Investment Officer for Turner Investment Partners, Corporate America is in the best shape since the 1960’s. Cash levels are at all-time highs, and strong earnings are continuing to grow.
- European Debt Crisis– With an additional bail-out by the European Union for Greece, the potential for sovereign debt failure in Europe have diminished.
- U.S. Population– According to the U.S. Census data, the population of the U.S. is expected to grow by 30 million from 2010-2020.
- New Construction– Housing starts jumped 14.6% from May to June. This may be the beginning of a sustained recovery.
There may also be a very brief window of opportunity open for buyers with congressional delay in raising the U.S. debt ceiling. Once a new plan is in place, there will be even more reason for sellers to be hopeful. Every buyer should be anxious to take advantage of all of the recent uncertainty that has been caused by media coverage of economic turmoil.