When I saw the headline for this article my mouth dropped. I imaged how many neighborhoods are almost completely vacant. I know here in Surprise, AZ there are subdivisions that are 70% vacant. Is that unbelievable, or what? I know that things are bad, but they could get worse with many mortgages set to adjust in the coming months and years. This may make this number even higher in the future. Thus reducing home values and making the number of listings and vacant homes skyrocket. This however is not as bad as it sounds. Let me explain, there are still reasons why this market is still good for our buyers.
For example, one glimmer of hope that remains is that our buyers have never had this much inventory to choose from. Or that homes values are lower than when most people bought during the big boom in the industry. I think that our buyers should be made aware of this, and to emphasis that this crisis will not last forever. The best thing for them to do would be to look around and find the best deal. Because when things turnaround again, homes might be harder to come by when that happens. Also home prices will not remain this low forever either.
As for new home builders, some have held off on big projects until this situation subsides. However, with their deep pockets, and the amount of business they do, I am sure they do not worry about this as much as we do, or, our buyers and sellers worry about this situation. They can always reduce their home prices and still make a profit. Personally, I have seen new home prices in the valley and many are great deals waiting for the right person to snatch them up.
For example, I have heard of homes 2,000 sq ft homes in a subdivision west of Phoenix, near Buckeye going under $200,000. I know in Mariopa I seen prices in low $100,000's. That does not mean that High End homes are not being built, on the contrary, I see many advertisements touting these extravagant homes all over the place. I am positive that they are priced well below what they could have sold for during the recent real estate boom. So if you were to ask me, it is a good time to buy a home regardless of size or affordability. There is something for everyone and just about every budget. Our buyers just need to realize that and understand the way our industry goes in cycles, and that this cycle will eventually become another cycle that may be better than ones we have seen in the past.
As for mortgages, I have been told that things are looking a little better in that industry as well. My friend in the business says he sees more options becoming available as time goes on. He also told me that the Federal Reserve may lower rates again when they meet at the end of this month. If this happens, our clients may feel inclined to buy and or sell. Rates are still historically low, and if you compare them, I recently saw a rate from the Regan era that was as high as 17%. Hopefully that puts into perspective for our buyers that interest rates are still very low and very good.
In closing, I do not worry too much about the amount of vacant homes on the market. As an Agent, that actually makes our jobs a bit easier than a home that is occupied. If you have occupants you have to call and schedule a time to show their home, you must find a time that is convenient for them. If you do open houses, this is even better because you don't have to worry about scheduling a time for the open house and a place for the family to go to when you hold the open house. I do not think that we should worry yet, if things get worse, it is to be expected. We are in a different market, and we must adapt to these conditions if we want to survive. If all we do is complain about the bad things going on, than we will not have the time to see the opportunities that are still out there to be made. One last example, an agent in our office made over $60,000 dollars last month, when the media said the market was at its worst. Its not what happens, its what you do and what changes you make that you make, that will count when things change.
Here is the LINK the the CNN MONEY article.
http://money.cnn.com/2007/10/26/news/economy/vacant_homes/index.htm?postversion=2007102612
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