"LIONS AND TIGERS AND BEARS...OH MY!"

Why the current real estate market should not frighten you

This summer of 2006 is like any other in history, with an abundance of information and opinions about the real estate market. All media reports seem to agree that sales are down, and inventories are up. It's a buyer's market and price reductions are a common occurrence on the daily multiple listing service reports. What does all this mean?

For many people this is just more bad news to face every day, along with news of war and terrorist threats. There are many other people who think that a slowing housing market is good news. Like many other circumstances in life we can look for, and find, good news in all this real estate business.

INTEREST RATES

Yes, interest rates have increased in the past year. However, when compared to historical data for the past 3 or 4 decades, they are still relatively low. Not only that, but there are more creative loan programs available today which offer people many options for purchasing and refinancing a home. Furthermore, the tax advantages of mortgage interest and property tax deductions continue to make home ownership an attractive alternative to renting.

INVESTMENT POTENTIAL

While there is absolutely a category of real estate buyer that buys and sells real estate for short-term profit, the majority of people invest in real estate with long term potential in mind. In addition to the wonderful tax advantages there are huge emotional dividends paid by home ownership, all of which can be found in the very definition of "home". The more people who are able to afford to buy a home, the better our society becomes as a whole.

A BALANCED COMMUNITY

If real estate prices decrease more people are able to afford a home. The idea of a community in which police and fire personnel, school teachers or young families cannot afford to live is a troubling concept. As the housing industry experiences a national "recession" more pressure will be on the Federal Reserve to keep mortgage interest rates low, allowing more economic and cultural diversity in our communities.

SUBURBAN SPRAWL AND RAMPANT GROWTH

A slowing of sales translates to decreased demand for housing. With less demand for housing there will be less pressure on municipalities to build more homes. This concept will result in growth that is less spontaneous and more planned. Our infrastructures will have reduced demand upon them and the quality of life for all citizens will subsequently be improved.

Let's face it, for the real estate market to continue to boom along at an annual rate of 20 to 30 percent appreciation every year would certainly result in catastrophic consequences. That kind of growth is simply not sustainable, nor should it be. It is far better for consumers to be able to shop for housing without intense competition that results in sales prices that are higher than asking prices.

It's far better as a parent to know that lower real estate prices gives our children a better chance of someday being able to live in this community, perhaps even raising their children here, and maintaining the exceptional quality of life we've come to love in this most beautiful corner of the planet. It's important to recognize that change is inevitable, and that change is not always a bad thing.

- Randy Steiger