Trying to time the real estate market is far too difficult for anyone that doesn't deal with it on a daily basis. It is akin to figuring out when you should get into or out of the stock market!
Having been in real estate (first hotel commercial, and then consumer), I've come to realize that timing depends on the individual. Life happens, and to think that fear or lack of understanding will keep buyers from purchasing, and sellers from listing their homes within a realistic price range is the result of trying to overanalyze ones situation. Think of it this way; Buying real estate creates opportunities for the current generation and all subsequent generations. While I was born in the US, my extended family came from Central America, and always indicated that you had to have good credit, and own real estate in order to succeed. Well, guess what, that was back in the '60's and it holds as true today, as it did then. Buying a home requires sacrifice, which is why I believe that you must prepare, and understand the moving parts before making that step to owning a home. I see so many posts from realtors and lenders that speak to educating their customers on a regular basis, that it amazes me to still hear some people in the industry tell their clients (or potential clients) that it is always a good time to buy without knowing a single thing about them. These people make me want to SCREAM!
Thankfully, many of those same people will be out of the business in the coming months as they will not be able to handle a real market where customization is key.
In case you haven't noticed, interest rates are STILL EXTREMELY attractive! Inventory is way up, creating downward pressure on price, unless of course you are buying the best home on the block. Sellers are getting desperate because they have a preconceived notion that they're home is worth value from a year ago. Time to face reality! Banks own so many properties because a home looked like an ATM machine for the past few years, or at least was treated that way, and we inherently knew that VALUE would always keep increasing, so who really cared about underwriting? Personally, I am freeing up some cash to buy up some properties. For my friends who have great jobs, but haven't saved much yet, no-money down loans are STILL available, except that now you have to PROVE your income and assets. I just helped a friend buy a condo in Santa Monica, CA for $375K; It appraised for $431K. That equity position is equal to what she socked away in her 401K over the last five years. What do you think she thinks of this market? A family recently purchased a home in San Bernardino county. They had to pool income from 2 families to qualify, but they made the sacrifice understanding that the home is for them as well as their kids, and would provide them stability moving forward. A third client in San Diego just purchased a home for $440K six months ago with no money down, that appraised for $495K before improvements. He was just married this weekend after he remodeled the interior, the front yard, and the back yard. I suspect that in this declining market that everyone complains about it will still appraise for $540K.
The moral of the story is we talked a year ago. It took him six months to 'get serious', but he stuck it out. This is a typical client for me. Rarely, do I get to work with a client that buys immediately, except for some of my investors, and theyre dealing with their own issues right now. For all of those that look at real estate as a career, not just a quick buck, embrace this market as you will come out STRONGER than ever. For those of you that were never serious about real estate, the polite thing to say is "we'll miss you"; the truth is we won't. Good luck in all you do!
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