Mr. Habib is one of the macro pundits I cite very often because he is correct so often. “Hate” may also be too strong of a word, as Mr. Habib is very professional, but he clearly has tremendous disdain for Ms. Olick – and this is why: Ms. Olick has predicted 27 of the last 0 housing crashes.
Fud Is Everywhere!
Ms. Olick, like most of the mainstream media and thousands of click-baiting social media personalities, has been sounding alarms about a pending housing crash since 2015! Mr. Habib loves to share her “doom and gloom” quotes in his videos, and then point out how wrong she is or was. It is not just Ms. Olick of course, as the entire internet is laden with predictions of housing Armageddon over the last 7 years – that obviously never came about.
Misleading journalists are such a problem because they foster so much unjustified FUD, or Fear, Uncertainty, and Doubt. And sadly, even officials from the Fed are fostering FUD with their comments about a pending real estate correction.
And all that FUD in turn creates the biggest problem in real estate right now: unnecessarily apprehensive and sidelined buyers!
Every Client Advisor at JVM is trained to help buyers overcome their concerns about the housing market. So, (1) I am encouraging agents to send their clients to us as soon as possible in the homebuying process so we can help them comfort and encourage their buyers; and (2) I am writing this blog to share some of the correct information that JVMers share with buyers to eliminate the FUD-factor, as the media are unnecessarily scaring buyers away with misinformation.
Investors, Hedge Funds, and Billionaires – Still Buying: We work with several very successful real estate agents who focus only on investors – and they are as busy as ever (so busy that even we are surprised)! Either those investors are very naïve, or they know that there are bargains to be found everywhere now with so many other buyers on the sidelines, and they know that real estate remains one of the best long-term investments and inflation hedges there is. More Telling Is This: JPMorgan Aims to Acquire $1 Billion in Single-Family Rentals.This was just announced, as they want to take advantage of today’s softer market. Or – how about this from July? Blackstone Puts Finishing Touches on $30 Billion Real Estate Fund Not Selling Either: Another fear factor that surfaced constantly earlier this year was the risk of large investors and funds dumping all of their investment properties at once and flooding the market once they realized their returns would shrink or that the market would correct. And – we have seen none of that, with the exception of iBuyers exiting the market (which is a good thing). The big “buy and hold” funds, however, continue to hold, and they’d be dumping like crazy if they expected the market to crash.
Taking Advantage of Today’s Market:An exceptionally experienced real estate appraiser said this to me yesterday after appraising “a bargain:” “If you got balls and cash….great deals are out there.” It is not exactly politically correct, and he certainly did not expect me to share it, but it is the sentiment of many professionals in the industry. Fewer buyers mean less competition for houses. And – that is also the exact same perspective that JPMorgan shared in the article I link to above.
Rates and Payment Concerns: To address this concern, we of course explain The Beauty of Buydowns, and offer other payment relief solutions such as interest-only loans and adjustable rate mortgages in some cases. But, more importantly, we explain how and why it is so likely that rates will soon fall so no buyer will have to keep her current loan and higher payment for very long.
Lower rates mean two things: (1) today’s homebuyers will be able to refinance into lower rates and lower payments; and (2) a lot of homebuyers will be able to afford a lot more and will likely return to the market with a vengeance.
Inventory: This may be the most comforting factor of all, as we need a surge in inventory to see a major correction in the market – and we are just not getting it. I in fact wrote an entire blog about the lack of inventory a few weeks ago, explaining why we are not seeing a surge. If you don’t believe me though, here is an excellent column that a friend shared with me yesterday: Housing Gridlock Is Here to Stay. The author explains that while sales are down big, so are the number of sellers – so prices are not dropping like everyone expected them to.
The above is just some of the info we share. But, my main point is that when agents refer buyers to us, we do our part in helping to address the biggest problem in real estate: we comfort nervous buyers who are unnecessarily concerned by all of the misinformation conveyed by the media.
