Buyer Considerations – Unemployment Numbers Improving
The Labor Department released its latest figures on Friday, reporting that 243,000 people were added to the workforce in January, causing unemployment to drop once again, to 8.3%. This is the lowest rate seen in over 3 years and another indication of a gradually improving economy. This was also the biggest nonfarm increase since last April and the third best monthly gain since 2006.
Although this is good news for most Americans anxiously waiting for the economy to improve, it may not be good news for homebuyers that have held off making a purchase. These buyers may have overlooked an important trend in real estate appreciation that has applied for decades;
“All bad news is good news for buyers,“
“All good news is bad news for buyers.”
Buyer’s should think of it this way, if a seller receives positive news such as just released unemployment figures, their confidence level goes up and the concern about an indefinite, sluggish recovery diminishes. When a seller feels more confident, they are much less likely to negotiate with a buyer. The end result for buyers is a price that is higher than it was before the news is released.
Buyers should remember that every time the economy shows signs of improving, or the experts point to stronger real estate market data, even if these trends are on a national level, sellers aren’t going to be as willing to drop their prices and the cost of buying a home goes up. This is especially true with the likely overcorrection in prices that has occurred during the past several years.
So, what is the best strategy to countering healthy employment data? Buy now before it improves even further. It can be surprising just how quickly the real estate market can turn around with the right impetus. Just think about what happened with the Stock Market.