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People who already have a home usually need the funds from the closing to secure their next purchase. If a “move-up” buyer wants to buy a home during a depressed market, that means they usually have one to sell themselves. Timing becomes very important and negotiations become more involved so neither party is forced into short-term housing or find themselves in rent-back situation because closing dates couldn’t match up. It’s important to work closely with your Realtor, your lender and be made aware with frequent updates from the other side of the table that things are headed in the right direction, and for a smooth closing. The ideal here is for all the stars to align, for everyone involved.

Interestingly, if a Seller wants to sell his home to take advantage of a “hot” market (when prices are fairly high) they generally are faced with the reality of securing that purchase within the same “hot” market, and can expect to pay a premium on the other side as well. In a very real way, things even out. Having said that, the way some areas are rebounding quicker than others it is possible for a Seller to sell for a higher price in an area that currently has much more demand than the area they are moving into next. This could be an inter-state move or it could even happen in the same county.

Obviously, economic patterns will change over time. They always have. Since The Great Depression of 1929, we have had quite a few periods of declining markets not only here in the USA, but globally as well. No matter the length of time between depressed markets and/or higher interest rates, you wouldn’t want to wait over a period of years to buy a home, would you? You would still potentially miss out on a substantial amount of equity and appreciation by waiting over long periods of time. Not to mention the losses you would have incurred in paying rent that you’ll never see again.

Among all of these economic shifts, according to the U.S. National Bureau of Economic Research (the official arbiter of U.S. recessions) the sub-prime mortgage crisis was a disaster. In terms of overall impact, it was concluded that it was the worst global recession since World War II. It began in December 2007 and ended in June 2009, and thus extended over 19 months. Of course this is common knowledge today and the country is still rebounding from the tremors felt along the way. According to Wikipedia, there are several “narratives” attempting to place the causes of the recession into context, with overlapping elements. Four such narratives include:

1. There was the equivalent of a bank run on the shadow banking system, which includes investment banks and other non-depository financial entities. This system had grown to rival the depository system in scale yet was not subject to the same regulatory safeguards. Its failure disrupted the flow of credit to consumers and corporations.
2. The U.S. economy was being driven by a housing bubble. When it burst, private residential investment (i.e., housing construction) fell by nearly 4% GDP and consumption enabled by bubble-generated housing wealth also slowed. This created a gap in annual demand (GDP) of nearly $1 trillion. The U.S. government was unwilling to make up for this private sector shortfall.
3. Record levels of household debt accumulated in the decades preceding the crisis resulted in a balance sheet recession (similar to debt deflation) once housing prices began falling in 2006. Consumers began paying down debt, which reduces their consumption, slowing down the economy for an extended period while debt levels are reduced.
4. U.S. government policies encouraged home ownership even for those who could not afford it, contributing to lax lending standards, unsustainable housing price increases, and indebtedness.

Fast forward to 2015, where there are many “boomerang” buyers that are starting to come back into the market now due to their time on the sidelines being almost up because of a short sale, or foreclosure they may have had to suffer though because of the circumstances stated above. Many homeowners are forced to rent because they wouldn’t be extended a line of credit – yet. Once they eagerly return to the game though, sources predict a large upswing in home sales and a subsequent decline in the rental market which for several years now has been white hot.

Today’s buyer would be very wise to form an alliance with their lender of choice, run a credit report, find out the reality of their situation and what programs they might qualify for with regards to homeownership and sweep up any mishaps from their past (if they have any) and put a plan of action into place and follow it diligently. For many people, this is easier said than done but if home ownership is still something you strive for – it is entirely possible to go out and get it done!

You might ask yourself – when is it appropriate to try and “time the market?” The short answer is never. One problem with attempting to time your purchase just right in tandem with economic patterns is that no one can really predict with any degree of accuracy – the future.

Many reports get published, predictions are made and some of them can be very close to spot on but the reality is that no one can tell for certain what will happen or when. Another challenge is that interest rates are most often higher during a recession (or depressed) market and household incomes might not be keeping up with the market. For that reason, fewer people can qualify for a home purchase during down times, than in prosperous times.

When it comes to timing the market, another big factor is affordability. That does seem to overstate the obvious but companies are typically not awarding employees with significant raises and cutting more than they are hiring. There are also heated battles being fought over minimum wage requirements all across the nation.

Did you realize that it’s been 5 years since the last time the federal minimum wage was raised? On October 10, 2015 the Labor Department is participating in a National Day of Action joining workers, government officials and business owners to show their support for increasing the minimum wage. They will be using the hashtag #RaiseTheWage to highlight why it’s time to increase the minimum wage in this country from $7.25 to $10.10 an hour for all hardworking Americans.

Since 2014, 13 states — including California, Connecticut, Delaware, Hawaii, Massachusetts, Maryland, Michigan, Minnesota, New Jersey, New York, Rhode Island, Vermont, West Virginia — as well as Washington, D.C., have already taken action to raise their minimum wage.

As of Jan. 1, 2015, those states plus Alaska, Arizona, Colorado, Florida, Illinois, Maine, Missouri, Montana, New Mexico, Nevada, Ohio, Oregon and Washington will have a minimum wage above $7.25. There are of course, 2 sides to the argument stemming from business owners claiming if the wage is lifted to $10.10 per hour they will have to cut staff because it will be more difficult to make payroll each week. On the other side, stands the employee and states that with all of the costs of living continuing to rise, how are they expected to raise their families with a paycheck that never comes close to matching the rate of inflation? It’s a good debate and it will be very interesting to see how things play out in October. What side will you be on?

Whatever change does take place, we can bet it’s going to impact consumer spending for certain across the board.