Real Estate Information

I am not one of those Realtors that is always gung ho on the market telling you now is always the best time to buy regardless of what is going on. If I feel that pricing will continue to decline, I will tell you that.  I may encourage you to buy, but I will make sure that we negotiate your purchase price to where the market is going.

I now feel that today, right now, is the most perfect time to buy that I have seen in years. Here is why: For March 2012 (this was also true for February) we are seeing pending sales increase 17%, inventories decrease by 21%, the days on market time has decreased by 10%, the list vs. sales price has gone up 3%, the number of homes available to a buyer has declined by 29.8% (that is huge) and the months supply of homes for the lower end has decreased a whopping 42.8% from 7.6 month's supply to 3.6 month's supply (huge again). 

I am a numbers person and those numbers tell a story. So should you buy? In the words of Napoleon Dynamite " Heck, yeah!" The lower end market, under $250,000 is very fast right now. For the first time in years I am experiencing multiple offers, homes going quickly and buyers missing out that didn't position themselves correctly when writing an offer. Buyers and Sellers always seem to use laser like focus to hone in on that $2500 at the tail end of the purchase price. We have $250,000 or $200,000 that we are working with and they act like that last $2000 is what their offer is all about. It isn't. They really need to step back and see that as a buyer if they really like the property, it is in good condition, good location and that it will give them many years of enjoyment, why would you walk away from it when you can borrow that $2000 at under 4% and for $9 a month you can live where you want to live? I realize for investors and rental properties the numbers need to be where they need to be to fit your investment formula, but for an owner occupied home, take a wide perspective. 
You can't even buy a pizza for $9. Just saying. And for the sellers that refuse to come down that additional $2000 on their price to a qualified and willing buyer, what are you thinking? Even if you can make 6% return on that 2000, it would take you 25 years to make $3000 off it on straight interest. Never, ever, ever in this market or even in a great market leave several hundred thousand dollars sitting on the table in the hopes of making under $5,000. It is not smart and it is not worth it so that you can feel smug at dinner parties telling your friends how you squeezed that last $2000 out of someone. Instead tell the story of what a fair deal everyone got and how great you and the buyers felt and what a wonderful transaction it was. Oh, and how happy you are to move forward with your lives rather than being in the group of sellers that still have not got the memo and are lingering on the market year after year. It is a much more joyful story and people like joy.

Last few points on why this is a perfect time to buy. When the lower end starts moving like it is and we are seeing more investors and cash buyers coming into the market, which we are, we know that the middle range will follow this trend. So get going, call me, call your Realtor, get your check book and let's get into the real estate market.

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.