What kind of market is really best for you?
A market controlled by great optimism? - Last seen in 2004 & 2005
This type of market is easy to recognize. The media will be full of encouraging news. Home prices will be rapidly escalating. Home inventories will be limited and buyers will compete for the best homes. Buyers will be excited about the prospects of earning quick, easy equity.
Here's what our buyers experienced in the last "boom" market like this:
- Sellers always got full-price offers, often over full-price with multiple offers.
- Builders raised prices on new homes every few weeks.
- Sellers didn't put their homes in top condition. They didn't have to to get a sale.
- Sellers never agreed to pay loan costs. Buyers had to add them on top of the list price.
- If a home inspection uncovered problems, the seller often refused to do the work.
- Since buyers were so anxious, lenders were able to charge higher fees.
- Buyers were forced to act quickly and didn't get to see very many homes.
This is what we call a "seller's market." That means market conditions benefit sellers, not buyers. You should be glad you didn't get caught up in this type of market. Many buyers who did are now disappointed that they were in such a hurry. They didn't get a good value with their home purchase.
A market controlled by pessimism? - The market we're in now
This kind of market is also easy to spot. The media will be sensationalizing a "housing slump." There will be reports of flat prices or even localized price drops. Buyers become reluctant and home inventories increase rapidly. Sellers will be competing for buyers. Although the local economy may be strong, all the negative news will dampen buyer's enthusiasm, compounding the seller's problems.
Here's what our buyers are experiencing now, in our current market which is like this:
- Sellers are very motivated, often accepting offers that are below market value.
- Builders have lowered prices and added huge buyer incentives to get sales.
- Smart sellers are putting their homes in top condition to increase appeal.
- Sellers willingly offer "buyer bonuses" and may even reduce price too.
- Buyers are asking for all repairs on their inspection to be done, and sellers are doing them.
- Lenders are eager to work with qualified buyers and are offering great rates and fees.
- Buyers are being patient and choosing from a large selection of homes, both new and resale.
This is what we call a "buyer's market." That means market conditions benefit buyers, not sellers. You should be glad that you have an opportunity to buy a home in a market like this. You will definitely get a great value on the home you purchase. When home inventories return to normal, a smart purchase now will turn into valuable equity.
Don't let the messages you hear about the market control your decisions.
Be guided by the best opportunities you have available now.
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