I read a newsletter from a seasoned and wise analyst, Adrian Van Eck that wrote this week:
“THE IRONY IS THAT IN A NUMBER OF MARKETS (LED BY DETROIT (UP 4.8%) AND CLEVELAND (UP 2.7%) WE ARE HEARING THAT THE LONG SLIDE MAY BE OVER, AND THE BALANCE HAS TIPPED BACK TO THE UPSIDE.
WE NEED A CATALYST, A SWIFT AND SUDDEN ADDITION TO THE HOUSING MIX. IT MAY WELL BE THAT THE NEW HOUSING LAW WILL SERVE THAT PURPOSE. IT IS SO NEW THAT MOST BORROWERS AND LENDERS ARE NOT YET AWARE OF WHAT IS IN IT. I BELIEVE THERE IS A GOOD POSSIBILITY THAT WITH PRICES NOW DOWN, THE ADDED PROTECTIONS AND FEDERAL ASSISTANCE IN THE LAW WILL CLEAR FEAR FROM THE AIR AND START THE COMEBACK PROCESS. MORE NEXT WEEK. ADRIAN VAN ECK.”
This sentiment has been expressed to me by a greater number of market insiders, and even consumers seeking to be ‘pre-approved’ for a new home loan so they can be “Ready to deal and buy!”. I learned last week that a resort area in N. Michigan has sold over $25MM in second homes since the beginning of 2008, that compares to $11MM in 2007, $13MM in 2006 and a peak of only $17MM in 2004. Interesting. People in the most expensive market in Michigan are buying homes at a record pace in 2008.
Could it be the rich get richer because they don’t react to the fear, with fear, but with opportunity and action?
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