The real estate market is full of myths that have been passed from person to person through the years. When these myths reach new ears, they have the power to create fear and panic in both buyers and sellers. The recent improvement in the state of the real estate market has led to the creation of new and fast spreading myths. What we are going to do is try to explain them and show you how they are not relevant.
- Recovery Is Happening Too Fast – With the sudden rise in home values, many individuals believe that this recovery is happening too fast. This has led to the belief and fear that this recovery will lead to the same problems that were experienced during the last real estate crisis. Here’s the truth, markets have cycles. This means that the market will once again experience high and lows, hopefully the lows won’t be as severe as the last time. There is no need to panic, simply understand that markets regularly rise and fall, it is in their nature.
- Demand Is Being Driven By Investors – The myth is that in some states real estate investors are purchasing a lot of low priced homes. The people purchasing these homes do not plan on living in them; rather they are going to use them as investment properties. The truth is that buyer demand is showing signs of increasing, however, these purchases are being made by first-time homebuyers and buyers simply looking for a new home. Investors have been making purchases, but they are not solely responsible for the increase in demand.
- Sellers Are Unable To Sell – The myth circulating in this scenario says that sellers are stuck and unable to sell their homes for their appropriate value. This may have been true during the recent recession, however home values are on the rise and sellers are beginning to notice that their value is getting closer to what they believe their home is truly worth. This is now a better time to sell a home than it has been in previous years.
- Interest Rates Are High – The myth regarding this situation is that interest rates have risen dramatically and aren’t as low as they previously were. The truth is that interest rates have gone up, but they haven’t reached a point where they are too high to work with. The rise in interest rates has been slowly occurring since the real estate market began to show signs of recovery. The Fed is showing signs that they plan on raising rates, but that will not happen until 2015.
- Foreclosures Are Over – During the recession we saw more and more homes foreclosed than in any other time. The myth regarding this is that foreclosures are no longer occurring. That couldn’t be further from the truth. Foreclosures continue to take place; the only difference is that they are not happening as often as they were in prior years.