Opportunities In An Emerging Market

Part II of a Two Part series

Part 1 "Which End Is Up" or "Understanding Our Housing Market"

Opportunities in an Emerging Market

There are always opportunities in any market. As in the stock market where you can profit on a given stock whether it is going up or down depending on the position you hold, real estate also has it's opportunities in a changing market.

It has been a seller's market for years. So where are all the buyers now? Clearly the interest rates have increased making homeownership more expensive, but that can't account for the current market pull back we're experiencing. Certainly some buyers are playing a game of wait-and-see with the home values and others the same game with interest rates.

Smart investors usually buy and sell when no one else is. We've devoted a lot of time to discussing "When is the Best Time to Sell a Home" for seller's wishing to try and time the cycles within a given year. For buyers, we feel an opportunity exists for the next year to acquire sound real estate investments. Housing price stabilization in the Bay Area and foreseeable job and economic growth all spell an environment rich for investment. If you are a buyer who never made it into the housing market now's an opportune time to take advantage of less competition and softer pricing. If you are waiting for interest rates to go down further, that's a fool's bet since you can always refinance if they do and you can do nothing about it if they don't. If you are waiting for home prices to plunge the same trap awaits-when will you know if you are at the bottom of a market?  When you see prices start to go back up.

For sellers wishing to sell and buy a more expensive home, now's your opportunity too. In the superheated market we endured the past 10 years, purchasing a replacement home contingency upon the sale of your home-even when your knew your home would sell-was almost impossible due to the overwhelming competition of offers with no contingencies at all. With the current high inventories and less competition many sellers are now forced to entertain offers with contingencies which were unheard of just a year ago.

Was your home worth more earlier in the year? Perhaps, and it will certainly be worth more again in the future; but so will the replacement home you area purchasing. Remember. If home values dip 10% and you're buying a more expensive home in real dollars you are coming out ahead.

If you are waiting to sell when you think the market is at its peak you already missed it. Do you wait for another appreciation cycle or move on with your life?

As we've always said, predicting the market is impossible to do with precision. Use real estate to enhance your life-not dictate it.

Drew & Christine Morgan-MorganHomes.com Belmont Real Estate

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