Where Are All The Deals?

The clock is ticking - December is the deadline for your tax credit Mr. and Mrs. First Time Home Buyer!

But where are all the deals?  Why can't I buy a home for pennies on the dollar anymore?

They are still there...they are just disguised!  Last year, it was easy to go and buy a home.  There was little competition, values had already taken a huge hit, and the property's were plentiful.  Now there are less homes on the market, values did not drop that drastically from last year, and everyone is out buying.  What gives?

Here is what you have to remember...it's a term called "Replacement Cost".  Housing values tend to trend towards what it will cost to replace a home.  In most metropolitan markets it stays around $124/sq. ft. without looking at land costs.  Different areas have different values based on land costs, taxes, and overall economic health but the houses still tend to stay around that price point.  The deals are there for the individual that factors this into their buying equation.  Too many times people focus on the final price - certain dollar values are used as a focal point of whether a deal is good or not.  "I won't pay more than $300,000."...does that sound like a good buying solution?  We have budgets, don't get me wrong, and if you do not feel comfortable with a plus $300,000 mortgage payment then don't pay more than that.  But why do buyers tend to think that a 1,800 sq. ft. home priced at $199,000 is a better deal than the 2,600 sq. ft. home priced at $250,000?  Simply put, the more expensive home is cheaper on a per sq. ft. cost not factoring in a larger lot and any improvements that either one may or may not have. 

Now if the $199,000 is the home that you can afford, then that is the one that you go after.  But if I am about to invest in a home that I plan on living in for the next five years, why would I not buy the home that has been discounted the most?  It will give me the best return in the future!

What is the point of all this - the deals are out there.  Look past the sales price and focus on the true cost of a home.  You may be surprised at what some of the houses out there are really being sold for.  And besides, the smaller homes are costing you about $10 more per square foot!

Jimmy Mulhern

http://www.HomesInVirginia.net