I was thinking today about whether we have created a lost generation of move-up buyers with the extreme swings of the market from 2003 until today. Between being upside down on their current homes and fear of the next big crash they feel they have no options.
I was talking with a client who is a move-up buyer in his mid 30’s with a great job, little debt, fantastic credit, money in the bank and owns his own home which he purchased in 2004. He bought at the height of the market and then proceeded to watch all his dreams crash and burn along with the market. He would love to buy a move-up home now but his underwater home is really limiting his options. He pays his mortgage right on time every month and hopes for more.
I then spoke with another client who purchased an investment property in 2004 in hopes she could expand her retirement options. She would love to sell so she can buy her retirement home. Unfortunately she is also upside down on her invesment and she doesn’t have the money to buy her way out.
Both of these clients represent hundreds of thousands of other home owners across the nation who limp along waiting for something to happen to allow them to realize their dreams. They bought homes, paid their mortgages and watched while the financial industry crapped all over the economy.
The increases in home sale prices might be one salvation for my clients and thousands of others but it will take a long time for prices to return to 2004-2005 levels. Employment levels will need to increase as will wages to allow buyers to meet tighter lending requirements.
I am a bit sad to think that we might have a lost generation of move-up buyers. I remain hopeful that time, and a recovering housing market will rebuild their dreams.