Why Now is the Time to Buy (in the Phoenix Metro atleast!)
Seller's Market (+)
Most People purchase real estate on "this side of the curve" in an increasing market. In this market it is known that prices have "bottomed out". Sellers are aware of this and are less likely to negotiate on price and terms. Seller-paid closing costs are becoming increasingly less, inventory is declining and buyers are settling for a home that "will do" instead of the home they want. Interest rates may or may not be lower than they were in the buyers market.
Nobody's Market "Bottom"
Buying at the bottom of the market is an illusion. The bottom of the market can not be known until after prices significantly begin to increase. Additionally this "bottom of the market" does not exist in time, but is merely the difference between a Buyer's market and a Seller's market.
Buyer's Market "-"
Experienced investors will purchase real estate on "this side of the curve" in a declining market. As prices approach the bottom, interest rate risks are known and minimal: Sellers are inclined to negotiate a more favorable transaction for the buyer, resulting in lower prices and more seller-paid costs. Inventory is greater, which allows the buyer more choices and negotiating power.
Now, the EXCITING News...
** Sales have been on an upward trend since January, after the sharp decline with the mortgage bust last quarter. Here's the interesting part... historically sales have been higher January through March, then DECREASE in April, before increasing again in May. As of Friday, April 25th 2008, closes and pendings continued their INCREASE, and are at the highest level in over 2 years. Pending sales are up 3% since last week. Inventory continues to decline as well. This is a VERY positive sign that the market has rebounded.
** For the first month since July of 2007, the median price range has remained STABLE at $220,000.
** Maricopa County has lead the nation 2000-2007 for population growth adding 808,000 New residents.
** Unemployment in the Phoenix Metro is amongst the lowest at 3.5%, with the National average at 4.8%. Job growth has remained strong adding 25,300 jobs last month, while there was an overall loss at the national level.
** Phoenix ranks 3rd for the lowest stress level among the Nations Major Metropolitan area (Best is Virginia Beach/Norfolk, worst is Detroit, Cleveland, St. Louis, Riverside & LA.). This is based on robberies, murders, unemployment, income growth, Long-distance commute, families below poverty level, mortgage payments, and death.
** The National Association of Realtors chief economist Lawrence Yun has shared his projections for our housing market as it ties to increasing rents and home sales. One of his predictions is for Arizona to emerge as a market where investors can be "covered on both sides" meaning that it will be possible to both cash-flow a rental home while also seeing the home values appreciate. Understandably, he believes Arizona will be "the hotbed of the real estate market" within 5 years.
Increasing rents + Decreasing home prices = Increased profitability from your Real Estate Investment.
** One of the Mortgage brokers I use has had 3 banks change their Phoenix Guidelines last week from being a declining market to a stable market. They raised their limits on owner occupied loans from 95% back to 100% in AZ. Also, 3 other banks increased their cash out loans from 70% to 80%.
Concluding
THERE IS NO BETTER TIME TO BUY THAN RIGHT NOW! The upward trend in closes, pending sales and prices in an area with strong job and population growth, stable economy and great weather...what are you waiting for?
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