Yah, yah, yah……those talking heads are always chanting about, “This is the time to buy” and I know, the sky is falling, right?
Well, not exactly. Word on the street is that the sky is not falling; good news, right? And as for the, “…time to buy a house,” it really is THE TIME!
Yay, yah, yah…..what makes now different than any other time that they say the same thing? Glad you asked! I’d like to answer your question in fairy tale fashion.
Once upon a time there was the real estate market. It consisted of developers, builders, lots, communities, new homes, and resales. In the kingdoms, the developers were considered Kings. They controlled the raw land. Their Courts would scour the countryside for places to build new empires. When they found the perfect place, they made deals with the subjects, purchasing their undeveloped farms. They took that land, subdivided it, put in roads, utilities, amenities, a moat or two, and laid out individual lots. Once the Kings offered the communities to the Princes (builders) they would purchase lots, usually at a King’s ransom. It was then that the Princes built palaces and offered them to the Lords and Ladies. The Lords and Ladies bustled around, choosing colors and options, creating the perfect castle. The Princes would prosper and the Kings got fat; all was good!
But one day, Dragons with fiery breath, breached the walls of the great kingdoms. They swooped down and with one swift exhale brought an entire kingdom to smoking ash. When the smoke cleared, the charred embers of the once strong real estate market lay withered and unrecognizable. All hope seemed lost; the Kings had taken cover in the far away caves and refused to come out.
Suddenly, the Princes had an amazing idea. What if we, in the Kings absence, go to the Nobles (lenders) and offer them a pittance for the Dragon ravaged kingdoms and lots. The Nobles where overjoyed! Why not get something for the useless parcels instead of nothing – the Kings were gone and the Nobles needed to be paid.
So, for a period of time, the Princes were buying up all the land from the Nobles, building castles for halfpence on the shilling, and acting like Kings. All the Subjects who had been out of work for so long were willing to work for the Princes at below Parliament rates along with the suppliers selling their wares for barely a profit. The Lords and Ladies were all very happy; a castle that used to set them back 300,000 Guinea was now closer to 250,000. Additionally, they could borrow money from the Nobles at unheard of interest rates!
And everyone lived happily ever after!
Skreech……………………hold up a minute! Maybe not everyone lived happily everafter! Some Lords and Ladies had not taken advantage of the Kings cave time.
One day a noise reached the caves where the Kings were hiding; it was a sweet sound. They became very curious as to what this noise could be so they popped their pale faces out of the entrance and listened; listened intently. And they did hear a sound rising over the snow, it started in low, then it started to grow. But this sound wasn’t sad! Why, this sound sounded glad! Every Who down in Whoville, the tall and the small, was singing without any presents at all!
Oops sorry, wrong story!
But close. When the Kings heard the happy sounds they headed back to the kingdom to see what was going on. When they found the Princes coffers full, the burned out lots all sold and containing shiny new castles, happy folks everywhere, and Princes doing Kings work, they knew something had to change!
The Kings took their rightful place on the throne and once again sent the Court out among the Subjects looking for land. The Subjects were now prospering and offered the Kings their land for much higher prices. Because the Kings needed to build back their empires, they agreed to the terms, knowing that they could pass along the increase in cost to the happy Princes who in turn would increase the castle prices to the very enthusiastic Lords and Ladies. The Nobles were tired of making farthings and decided to start raising the interest rates.
All of a sudden, they realized that the castle they could have purchased a few months ago; 3500 square feet, $250,000, interest rate of 3.75%, monthly payment of approx. $1500.00 was drastically different now! The Town Crier pointed out that interest rates were now 4.75% and you could only get 2500 sq.ft castles for $250,000 – thus making the monthly payment more like $1800/month. It didn’t take them long to do the math, 1000 sq.ft less for $300 more/month. The other option, since some of them couldn’t really afford more than the $1500/month was to look at castles prices more around $200,000. Unfortunately that caused a further dilemma – houses selling at $200,000 where more like 1500 sq.ft. which no longer fits the family of 4 let alone all the Servants!
Now there were higher interest rates, increased castle prices – hmm, doesn’t sound like “happy ever after” to me! Maybe it is for the Kings, Nobles, Subjects, and Princes, but seems to me that some Lords and Ladies are not going to be so happy.
Let the waling commence.
Oh yeah, to top it all off, since the Landlords of the kingdoms became aware the Lords and Ladies couldn’t get what they wanted, they increased the castle rental rates.
So – everybody wins; Kings, Nobles, Subjects, Princes, and Landlords!
Wait, wait, wait, wait, wait! This still doesn’t seem good for the Lords and Ladies.
And now the moral of the story – good you stayed around – I end where I began
The Savvy Lords and Ladies Will Buy a House This Spring