Friday, December 19, 2008

The Global Credit Crunch: Benefiting House Buyers?

Despite the groans of Wall Street insiders over the housing slump, will the ongoing credit crunch be a good thing for prospective house buyers since real estate agents are now forced to slash prices just to make a sale?

By: Ringo Bones

Even though it is a sure sign of our ever-deepening global credit crisis when real estate agents and property developers start to aggressively slash their prices just to make a sale. They are even staring to reduce the prices of their “Root of all Gentrification” luxury-themed gated communities. Fire sale prices without the fire?

The bad news (or good news depending on which side of the transaction you lie) is that prospective buyers are still harboring a wait-and-see attitude. Understandably so given that property prices will certainly be slashed further in the near future. The better deal that’s still at hand in the near future can be too tempting to pass up. Worse still, the housing market could initiate a runaway deflation caused by delayed spending of the wait and see attitude of prospective house buyers.

No matter what side of the transaction you lie, sometimes you’ll wonder if this is just a simple by-product of the global economic downturn or a much-feared anti-gentrification backlash. Given that the new generation can now safely afford to be “noveau-poor” due to the new income opportunity paradigm provided by the Internet, they might be practicing a new form of Socialism for all intents and purposes. And since the “nuclear” family had fallen out of fashion for over 30 years now, real estate agents and property developers better start tweaking their antiquated business models if they chose to survive in our current climate of fiscal and consumer austerity.

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