For the past few months, real estate professionals have been urging buyers to hurry up and get their offers in by April 30 in order to take advantage of the Federal tax credit. The message has been "If you don't act now, all is lost." Which is very similar to the old proverb: "He who hesitates is lost."
I did a little research and found that the rest of the quote is: "Swift and resolute action leads to success; self-doubt is a prelude to disaster." The proverb goes back to 'Cato' (1713) by English essayist and poet Joseph Addison.
That surprised me, because I thought perhaps it came from something like the Revolutionary War, when hesitating might mean losing your life.
The phrase has been used many times by authors throughout history. Interestingly, one of the more common uses referred to ladies who couldn't make up their minds to accept a suitor.
But back to real estate and the loss of the Federal tax credit. I think many agents are afraid that sales will completely dry up with it gone. But why? Consumers were buying homes long before anyone even thought of a tax credit.
They buy homes because they want and need them, not because the taxpayers are going to give them free money. Some may have hurried a bit more, and real estate agents may see a little slump for the next few months before the next wave of first-time buyers is ready to come into the market, but they will come.
That means real estate agents need to continue marketing, but with a different focus.
All buyers - first time or 10th time - need to be shown that the time to buy really is now.
In my work writing blog posts and marketing copy for real estate clients, I often have occasion to view sales statistics. And what I'm seeing, especially in areas that were hard hit by the foreclosure crisis, is that while average prices have been slowly creeping upward, those foreclosures and short sales are still holding down the overall average prices that consumers see reported in the news. Non-distressed homes are selling for considerably more than lender-owned homes and short sales.
And, since distressed properties make up a larger proportion of sales than listings, in some areas it might not be long before those bargains are gone and prices begin to rise more sharply.
Then there's the interest rates to consider. Financial experts are warning that interest rates are going to rise.
Lower prices + low interest rates mean that those who buy today could be strutting like proud peacocks a year or two from now when they're locked in to a low payment - while those who hesitated are faced with higher prices, higher interest, and much higher payments.
We can't say that "All will be lost," because paying more for a house isn't a life-threatening disaster, but it could mean that those who hesitate now will be forced to buy smaller houses, maintain two incomes, or forgo other pleasures in order to keep up with house payments.
Or, they might have to remain renters - possibly for life.