I'm kind of a news junkie - I usually read all the news magazines every month, and dig around on the internet  looking for the story behind the story. I also spend a lot of time every day talking with real estate agents around the country. There seems to be a collective paranoia that has gripped the real estate buying public, and our friends in the news business are feeding that paranoia with constant headlines about the horrible real estate markets. Let's take a closer look. Yes, there are some parts of the country where the market is very soft - I understand that sales of coastal properties in Florida are down 50% from last year! Many talking heads report that as values being down 50%! These are totally different things. Yes, prices have gone down some 10-15%, but not near as much as the news organizations would have us believe.

 I work in the Colorado Real estate market, and in metro Denver, sales are down 6% from last year. Despite that, in some neighborhoods and price ranges, prices have been going up! In Boulder, home to the University of Colorado, prices in many neighborhoods went up 6-8% over the past year. Back in the days of explosive growth in values (not so long ago), sales volume was often way down as prices skyrocketed. This is simply supply and demand. If there are loads of people who want to buy property, and not many listings available, prices will go up, but sales volume will be way down.

Consider the plight of the first time buyer. Let's look at a young couple who have been renting a 2 bedroom condo. They're secure and established in their jobs, and have been thinking of buying for  few months. Every day they get bombarded with messages telling them of the crisis in the real estate market, and how mortgage companies are going belly up day after day. If I were in their shoes I would sure put my plans on hold. But does that make sense? Let's say they buy a condo or small house  for 93% of asking price and it takes 2 years for the market to turn around, so it goes down in value 2% this year and another 1% next year. It seems like they made the right decision. Wait a minute, though - where will interest rates be in 2 years? If things heat up, will there be inventory available to buy? What if 2 years from now they have to pay 97% of asking price? Remember, they've been making mortgage payments for 2 years, helping build equity. I think that when you're in a market that's just had a correction, interest rates are terrific, and you have more inventory to choose from (and therefore more negotiating power), buying makes more sense than ever.