Here we are, 8 months after my original post concering things such as whether or not we are in a “buyer’s market”, mortgage rates, and the ability to get a loan. Housing inventories hit their peak in November of 2008 and since then we have seen close to a 20% drop in inventories. The drop in inventory is due to a combination of different factors. Those homes going under contract, homes not getting sold and therefore expiring from the market and lastly homeowners who take their homes off of the market for various reasons. Irregardless of the reasons, it is a better market today for sellers than it was 8 months ago. I have said it before and I will say it again, we are NOT in a buyer’s market.
The reasons for this statement are as follows;
– inventories are steady or declining
– there are many buyers looking for homes
– funding is still available for those ready to buy
What we are truly in is a post-bubble price adjusted normal market.
As is any market if you do not have to rely on a loan to make your purchase, then you are in a much better position to negotiate a better deal for yourself. There are great properties available to CASH ONLY buyers.
Everyone you talk to has an opinion about the current housing market and for most it seems that all properties should be sold as if in a fire sale where the seller should feel lucky to get anything for their home. Every week during an Open House, as visitors walk through the door, I can easily pick out the ones who are just there to admire the interior decor, and are not “in the market”. These individuals, just like new to market buyers and sellers, do not understand the true complexity of today’s market condiditons. Inventory is high relative to 2005. Prices are low relative to 2005. These two factors by themselves do not make for a buyer’s market, and those who come into this market with an attitude that they can simply get something for nothing will get nothing. On the flipside, many sellers are caught up in the past and feel they are losing money if they do not get what their home would have sold for in 2005 so they become hellbent not to “lose money” on their sale. They fail to realize that their future purchase will also be in the same scenario. Case(s) in point. I have been working with many first time homebuyers, and I have been getting familiar with almost all of the inventory in their price range in numerous towns by seeing almost every reasonable home that comes to market. No simple task I assure you. Many homes are reasonably priced with a little negotiating room, others are terribly overpriced. We come across a home which they actually like, and of course ask my opinion about the price they should offer. For this particular property I suggest full price knowing very well the home was excellent relative to the price range. They disagree, offer less, get the price accepted only to shortly thereafter lose the home to another full price offer. There is never a simplistic rule such as “Always offer 15% less than asking price”, which is unfortunately the ideology they subscribed to. I have heard this opinon more than once. The best advice I can give anyone whether buying or selling is to hire a knowledgeable agent that will work in your best interest and whom you are assured is giving you the best advice possible.
On the mortage front, there are still plenty of loan programs available with as little as 3.5% down payment and even for those with less than average credit. Mortgage rates are still at 30-40 year lows and combined with the federal $8,000 tax credit, this is a great time to attain the dream of home ownership. If you are buying or selling a home follow the links to the right or go to PaulPerrone.com