Part of the reason for the current foreclosure situation is that people were buying homes they just couldn’t afford. This was due in no small part to the fact that home prices were increasing at unprecedented rates, and salaries could in no way keep up with these inflated prices.
If the real estate market becomes more realistically priced, is that really a bad thing?
NAR’s Housing Affordability Index (which measures the relationship between home prices, mortgage interest rates and family income) rose 10.9% in December 2008 to its highest level since tracking began in 1970.
In other words, more people can afford to buy homes now than in the last 39 years!
First-time buyers currently make up a full 41% of all buyers in the United States, and with the rising Housing Affordability Index, this percentage will probably grow. These first-time home buyers often have the strongest emotional response to homes that have been staged because they’ve never had the experience of buying a home before. Stagers help them see the home in its best light and help them imagine themselves living there.
Canada, with a total population of just over 33 million, is a much smaller real estate market. It has not experienced the same turmoil as the United States because of much stricter banking and lending laws. However, the Canadian real estate market has declined both in the total number of home sales and in average prices.
According to The Canadian Real Estate Association (CREA), national MLS home sales fell 17% in 2008 and are expected to fall an additional 16.9% to 360,900 units in 2009. They project a rebound in 2010 with total national home sales increasing 10% to 396,600 units. CREA President Calvin Lindberg says, “The essential selling ingredients in today’s market are realistic pricing, marketing, and preparation.”
Preparation = Home Staging!
In a post here on Wednesday, I will elaborate more on this topic. In the meantime, I’d like to hear what you think. Please leave your comments below to add to the discussion.
Also, if you haven’t already done so, I recommend you download your own copy of the free report “Ask Staging Diva: Can I grow a home staging business in a depressed economy?” to learn more about the current economy and its affect on our industry.
Debra Gould, The Staging Diva®
President, Six Elements Inc. Home Staging
Debra Gould developed the Staging Diva Training Program to create opportunities for others to grow their own profitable home staging businesses. There are currently over 1000 Staging Diva Graduates around the world. Debra encourages anyone concerned about starting or growing a home staging business in today’s economy to download her free special report: “Ask Staging Diva: Can I grow a home staging business in a depressed economy?”
[tags] Debra Gould, Staging Diva, home stagers, home staging, home staging in a depressed economy, starting a home staging business, NAR, CREA[/tags]
Interesting article – makes me long for the days of being a first-time buyer. That would be pretty cool right about now to snatch up a fabulous deal!
Debra,
It is so true how first-time home buyers really respond to home staging. Most have no real sense of how far their money will take them and most have the unrealistic notion they can start with what their parents have currently. A well staged modest home will really stand out to first time buyers who might be turned off or afraid to purchase a home with even minor repairs to be done. Most first time buyers don’t have much extra cash to do those fix-ups and repairs anyway. So thank you for putting this out there in the media.