Did you snooze? Did you lose?
Now that we have very little inventory, fewer foreclosures and at higher prices, short sales with lenders asking for market value, those that have been trying to get up the nerve to enter the real estate market are swarming for that good deal. Unfortunately, like Patricia Kennedy writes in this blog, that happened a while ago.
During the housing crisis, the National Association of Realtors was running an ad campaign telling people that it was a great time to buy a home. And at the time, it left a lot of people scratching their heads.
"What?" you'd say. "The market is in free fall! The economy is a total mess! It's a terrible time to buy!"
But I think that NAR was onto something.
Of course, this post is all hind sight.
In 2011, interest rates were at historic lows, there was a huge amount of inventory, and prices had indeed tanked. If you found a place you loved, chances were you could sleep on it and then have your agent write up an offer the next day for under the asking price. The sellers, who were likely sick of making the beds and keeping the place spotless, would be ecstatic to get an offer and the negotiations would begin. And you could include all of the clauses designed to protect sellers, like contingencies allowing for a satisfactory home inspection, appraisal, and financing approval.
In 2013, the interest rates are still very low, but there is no inventory and prices are are on the rise. If you find a place you love, your agent whips out her iPad on the spot, logs onto ZipForms and Docusign and immediately prepares an offer for your electronic signature. When she calls the listing agent (who probably feels pretty smug right about now), she'll hear there are already 14 offers registered and they will be looking at them in two days - that will give other buyers a chance to enter the fray. To get the place, you can't have any contingencies whatsoever and you'll probably have to pay over, sometimes way over, the asking price.
So is now a good time to buy? Well, certainly not as good as 2011, but probably better than after the spring market winds down.
If you are thinking about purchasing a house or apartment in the DC area, time is not your friend. Every bidding war raises the prevailing values of homes in the neighborhoods where they are taking place, and chances are pretty good that would include wherever you'd like to live.
So if you were one of those buyers who snoozed through the down cycle, you lost at least a bit. Perhaps a good bit, depending on the neighborhood where you'd like to live. If you wake up early in the up cycle you'll probably lose less than if you wait for the upturn to take hold.
If you are planning a move to or from the Washington area, I can help. I am licensed in DC, Maryland and Virginia. Please email me at Housepat@mac.com or call 202-549-5167.
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