Why the election will not impact the real estate market.

I've been hearing so many people out there, buyers and sellers alike, speculating that things will improve drastically as a result of what happens in November. Specifically I'm talking about the impending presidential election.

I believe, personally, that this is a lot of hogwash.

Now I, personally, live in an area, (the Chicago area specifically), that seems to have a tremendous liberal/Democrat bias. Obama is their boy and they all seem to believe that if he is annointed in November, that there will be a miraculous change to the real estate market on par with how Jesus changed water to wine.

I hate to break it to them, and everyone else who holds this belief but no matter who is elected be it Obama or McCain, the real estate market will not inherently change.

So many people hold the emotional belief that the Republicans are to blame for our current economic woes and that simply changing figureheads is going to "change" everything. But that is not the case. The congress has the Democratic majority and, with that, they could have easily and successfully changed politics in Washington over the last couple of years. They could have ended war funding and brought the troops home, they could have enacted stricter laws and penalties for the truly criminally misleading loans that have been written, (which is the REAL issue at hand here), and they have been impotent in effecting any change. In fact, overwhelmingly, they've towed the line for the current administration which, in my opinion, that whomever you vote for the outcome is likely to be the same. The two parties exist in theory as a dog and pony show but the course of the country has already been determined.

That said, if you look at the fundamental cause of the current crisis, you have to look not at the government per se, but at the banking industry. These guys are the real culprits and the blight that has been unleashed on the greater economy is a direct result of some really bad decisions.

The government, for all it's infinite wisdom, should have taken some larger precautionary steps long ago to avoid the fallout of what we're all dealing with today. Stricter regulation may have slowed the tremendous boom that the real estate market saw in the last 5 years or so, but it would have kept false growth in check. It would have curtailed a lot of speculation and it would have kept people from falling prey to loans they simply could not afford.

We should have seen this coming! It was exactly an environment like this where banks were making wildly speculative loans to unqualified borrowers, that threw Japan into a 10 year plus recession! TEN YEARS!!!

No matter what side of the political aisle you're on, I think there are plenty of people both Democrat and Republican who are unhappy with the present administration. But thinking a change in leadership will provide some sort of miracle relief to the current doldrums in the housing market is simply ludicruos.

What you need to look at and what matters statistically, is a very simple thing. If prices are moderating and interest rates remain low. If the negotiating power is in the buyer's hands and they are able to secure funding and a deal that places them in a positive situation: That means it is time to buy.

When rents outpace mortgages or on par with them, then it is a good time to buy, or in other words: If you live in an area where your mortgage would be equal to or less than your monthly rent then you should buy. Otherwise, it makes more sense to rent until a point of equalization is reached.

It's not rocket science. It isn't politics. It is simple economics.

It's more about how you manage your money than it is who you vote for.

Hello::(hello)::is there anybody out there?

Hello buyers, sellers and everyone in between.

I've been off the blogosphere for a little bit here, licking my own wounds from the slumping market here in the Chicago area. I know I'm generally a pretty solid source of optimism, but the last couple of months have been nothing short of tragic.

Where have all my buyers gone?

Afraid I'm guessing and, it would seem, for pretty good reason. All of the economic indicators; the price of food, gas, and the essentials of life: All of it seems to be spiraling out of control in the worst possible way. To top it off, we've also seen a pretty steady delcine in both the prices of and the sales figures for both new home sales.

But wait...what's this? A glimmer of hope? A report that says there was a slight increase in existing home sales last month?!?

Well there very well might be a good reason for that and buyers, you need to be ready to get your heads out of the sand and prepare for buying opportunities because there will only be a small window.

Here's why:

It would appear that home values have been and will continue to fall albeit at a slower rate. This decline has lasted approximately 18 months and the "experts" predict we won't actually see a turn around for another 6-8 months. Here comes the "but-monkey"...BUT, it does appear that sometime between now and the first of the year, that the Federal Reserve will begin to raise interest rates to help stave off further devaluation of the sagging dollar.

What does this mean?

This means that now may be the perfect storm for buyers. The interest rates have stagnated for the moment and are holding steady. If you have good credit, particularly if you are a first time buyer with solid credit scores, it is an excellent time to get a loan at a very attractive interest rate. And, to top it off, with a glut of inventory out there it is possible to really negotiate some serious deals, particularly with people who are in a position where they have to move.

So buyers, get ready and get out there. This is the time to buy if you can because in a couple of years, when this slump is over, the sellers will have their revenge and anyone who buys in the next 6-12 months should be sitting pretty.

Sorry sellers!

Keep your chins up though, the buyers are out. You're going to have to be reasonable if you want to sell.

More soon.

Rick