The Opportunity Bubble

By
Real Estate Broker/Owner with Hunt For Homes, LLC

Broadly speaking, the best time to buy a house is in a buyer’s market when there are more houses available for sale than there are buyers. Timing the market so you buy at the “bottom” is truly an elusive goal. However, buying near the bottom of the market is a desirable objective and some suggest that we are at or near the market bottom now.

If you can view the real estate market historically, you would see that we are living in opportunity bubbleunprecedented times. Few can remember a time when both prices and interest rates were both low at the same time. Provided you have income and can qualify to purchase a home, few could argue that we are living in a huge “opportunity bubble”. 

The primary factor to consider in deciding when to buy a home should be based upon your motivation to purchase. The right time to buy a home is obviously not the same for everyone.  If you are uncertain about whether or not this is the right time for you to buy, determine if you have a compelling reason to do so. If you do, then now is the time to make your move!

investor opportunityYou may need to buy because you're relocating for work, upsizing as a growing family, downsizing as 'empty nesters' or have just decided to move to new neighborhood. You may be looking for an investment property or tax shelter, desire more privacy or just wish to move closer to family.

The many buyers who “missed out” in the last rush to buy before it was “too late” are now reaping the benefits of having “waited”.  Many “lucky” buyers have now become homeowners for the first time and a whole host of new investors are set to become the next generation of landlords.

Knowing that a golden opportunity lies before you, consider the following factors:

1.     Decreased Housing Inventory – Though the number of distressed properties – both short sales and foreclosures - has increased as a percentage of the total available inventory, the overall total number of homes for sale has been steadily declining. In fact, the number of homes for sale in Jackson County Oregon fell nearly 23% since this time last year with just a 4-5 month supply currently available. Unless inventories increase, we will likely begin to see a trending up in prices.

2.     Investor Opportunities – Home owners who have lost their homes and cannot investor opportunityqualify to purchase another, but require a residence nonetheless, have joined the growing masses of renters who are vying for the limited supply of rentals on the market. This trend is forcing the cost of monthly rents upward. This large viable pool of tenants presents rental property investors with solid income opportunities. With attractive prices and low interest rates, most rental opportunities provide a positive cash flow from the onset.

3.     You Need to Live Somewhere – In the current buyer’s market – with low prices and interest rates - if you have adequate income and credit, and a secure job, it is often far less expensive to own a home than to rent! If you want to own a home, now is the time to give it your serious consideration.

4.     Limited Time Opportunity - Current interest rates are being held down intentionally by the Federal Reserve to stimulate an economic recovery.  But these rates cannot be held down indefinitely. Take advantage of these rates while they are still at or around 4%.

5.     Inflation Hedge - With growing global financial uncertainty, spiraling debt and hyperinflationdeficit spending, and the unchecked printing of currency, interest rates will inevitably rise once the market begins to recover and inflation kicks in. Owning a property which has utility – a viable use – is a better protection from the ravages of inflation than cash or even precious metals.

Financial considerations aside, the best to time to buy a home is when you are ready.  Take into account where you are in your life relative to your age, marital status, the size of your family now and in the future, your occupation, your down payment, your income, and how you choose to enjoy your recreation and leisure time. Remember, your motivations for buying a house should be your primary driver.

In the next installment, I’ll discuss the 9 primary factors to consider when identifying the home of your dreams.

 

Posted by

Tod Hunt, Broker   Home Quest Realty Medford OR

INTEGRITY.  SERVICE. RESULTS!

www.todhunt.com

Mobile: 541-778-1114

Office Line: 541-774-5503

Office Fax: 541-612-4621

1575 E. McAndrews Road, Suite 200

Medford, OR 97504

Comments (2)

go to RealEstateFaster.com & get 20 Listing Appointments per month
Real Estate Faster - Los Angeles, CA

Thanks for sharing your useful factors on when a golden opportunity awaits!

Jan 18, 2012 09:48 AM
Tom Arstingstall, General Contractor, Dry Rot, Water Damage Sacramento, El Dorado County - (916) 765-5366
Dry Rot and Water Damage www.tromlerconstruction.com Mobile - 916-765-5366 - Placerville, CA
General Contractor, Dry Rot and Water Damage

Great post Tod, the opportunity to take advantage of this market is here. Thanks for breaking down the various markets available

Jan 18, 2012 06:01 PM