In 2007 I found self telling many potential home sellers to NOT sell! The Brighton condo market started taking a downturn, ahead of the rest of the market. While Newton and Brookline real estate agents were celebrating million dollar deals, I felt like Cassandra around my colleagues.
Although I had a stellar year in real estate, I knew something was wrong. My first-time home buyer business was slowing down considerably. Brighton condos, even great ones at high owner occupancy buildings, could not be sold profitably if bought within a few years earlier.
So my business naturally focused higher end homes, but I knew this was about to take a nose-dive. I learned very quickly that if Brighton condos are not selling in 2007, nothing is selling in 2008. Why?
The Cleveland Circle condos were bought mostly by first time home buyers. If they are not in the market, then everything else slows down. Real estate transactions are a chain of events; first time buyer moves into a condo. The condo owner upgrades to a larger condo or a single family home, which is sold years later and traded up again.
If the initial event – which is the first time buyer becoming a homeowner – does not happen, everything else soon comes to a halt. And it did, in 2008.
So here we are four years later and I am here to tell you that home buyers have been in the market for about a year now, and the Brighton condo market is hot! Rents are way up, mortgages rates still low, and conditions are ripe for the first time home buyer.
Next time you are looking for some economic predictions, at least in the real estate market, forget the pundits. Ask a potential first time home buyer what they plan to do and why. Then make plans accordingly, no matter where you are on the real estate transactions chain.