Lessons from Douglas Ebenstein discusses the changing appetites of young Americans as a result of their exposure to multiple cultures and life experiences. We are all familiar with the urban planners, designers, brokers, and developers who created and marketed gated communities, condominiums, cookie-cutter housing, and suburban sprawl. Their vision provided an appealing picture of America’s future real estate market.
Now, that same vision is being challenged by today’s homebuyers. They recognize that traditional real estate marketing has failed. The “me-too” syndrome is becoming common place. The Internet, blogs, and Internet-based real estate advertisements are challenging long term real estate trends.
For many homebuyers in the suburbs, the perceived failure of today’s real estate market is causing them to seek out different types of housing options. The suburbs are becoming a more desirable place to live. This is especially true for people who are coming to the suburbs for job fulfillment. In other words, they are searching for jobs that offer more freedom, such as work from home or online. This mindset is quite similar to how people felt about the concept of living in the city prior to the development of the suburbs.
The author examines this trend from two perspectives. On one hand, he admits that it is difficult to sell homes in the suburbs when the demand for housing exceeds the supply. On the other hand, he argues that homebuyers need to realize that the market will rebound. That means homes will soon start to appreciate in value. If real estate professionals can correct the problem, then there is a good chance that the overall real estate sector will experience a long-term rebound.
The author examines the tendency among real estate professionals to buy homes when interest rates are low and to sell them when rates rise. It seems that real estate professionals are presently focusing on these two types of scenarios as opposed to the full spectrum of housing-related opportunities. That could change. If interest rates start to rise, for example, and homebuyers have access to lower-priced houses, they may start to focus on those types of properties. Likewise, if rates fall, homeowners will be less likely to pass on the opportunity to buy a lower cost house and sell for a profit.
There is also a need for perspective in today’s piece. Douglas Ebenstein seems to downplay the importance of federal stimulus programs. However, if you look at the details of his book, you’ll see that his analysis is not so far off. Housing sales have declined by almost 10% since the credit crisis began, even as the number of new home construction has risen. Only about half of all housing starts are financed through FHA-insured loans. Homeowners can avoid this problem by getting pre-approval for a loan from a subprime lender, but even then, they cannot be too picky.
The author takes a dim view of today’s economic trends. Many people buy homes today because of subsidies offered by the government. However, these programs are scheduled to end in August of 2021. In light of this, Ebenstein does recommend that citizens save whatever subsidies they are able to by delaying purchases. Instead of buying right now, save until rates go down. By waiting until rates go down further, the buyer will be able to purchase a lower priced home with more financial security.
Overall, Lessons from Douglas Ebenstein provides some solid advice for homeowners hoping to purchase a house in an interesting market. Although the economy has taken a turn for the worse, it is possible to get great rates on real estate in today’s climate. The book also offers some useful advice about negotiating with the seller and finding out if financing is available. For people looking for new or affordable real estate, this book is a good read.