When will the Market Turn

Is now the time to buy real estate? This is a question many are asking themselves and discussing around the water cooler, at dinner parties and even on the school playground. Vickie Green at Bankrate.com prepared a wonderful article that I am outling here for your quick enjoyment. First of all some quick facts : Nationally, housing prices were down 7.7% in November 2007 National housing inventory estimate is 17.9 millions available units Local (Coastal Georgia) current total inventory as per Brunswick MLS:2214 Homes 2141 Lots Now what the article said: WHO SHOULD BE BUYING NOW? If you are a dual income customer with assets and resvers, a stable job and at least a 680 credit score then you should enter the market at this time. WHO SHOULD NOT BUY NOW? If you are a retiree who is downgrading, you may actually be loosing money making the downgrade. If you have 20% in equity and no PMI in your home. If you have a shaky job situation or experiencing upcoming life changes such as a transfer in the next year or two ( the article suggests that you wait) If you have heavy debts, bad credit, no assets or reserves ( this will make getting a mortgage harder and more expensive). If you are looking to flip houses. Buying trends: FORECLOSURES- Ok my friends, lets face it the bank ain't dumb. Those of you who have bought into the lies that late night info commercials have told you that you can buy a foreclosure for penny's on the dollar; well, what did momma tell you when you were young? If it sounds too good to be true then it is. As a local REALTOR, and one who has dealt with the loss mitigation department of some banks/mortgage companies, Foreclosures are not what they seem. If you do not have immediate (30 day) access to the money you will use to purchase. If you have no patience, If you are unprepared to invest more money in getting the property ready for the market after the acquisition and if you have no idea of what the current local market is doing then do not waste your time with a Foreclosure. Ms. Green's article give these pointers: The foreclosed property should be significantly below the values in teh area. You the investor should be willing to invest in repairs Although you will be buying as is, with no disclosures you should have inspections done. Basically, in this market, it is my opinion that if you have the capital to invest in foreclosures be prepared to do some hard negotiating, be willing to walk away from a deal and be willing to lease the property unless you are purchasing it for a personal residence. LAND Now is the time to acquire land. But you must remember that a land investment is a buy and hold investiment. And unlike a house you must have an idea of what is going on with the land you are buying, does it have sewer and water, what is the zoning, what is scheduled in the area's future development plans surround the land you are purchasing? Think of buying land (even if you are planing on building your retirement or dream home there) as if you were buying a million dollar company. DUE DILLIGENCE is the key. Also be aware that most lenders require 30% to 60% equity in the land if you are financing the acquisition. COMMERCIAL Multi family properties are in strong demand so any multi family project is good for commercial investing. WHAT ARE BUYERS LOOKING FOR? Buyers are falling into three catergories: A). Bargin Hunters- Waiting for that $300,000.00 house in the gated community to go for $150,000.00 B). Signs of Stability- "Can we get some market stability, I mean can at least 5 of the 10 houses in my neighborhood go under contract?" C). Lower Interest Rates and Prices- "Well, we are going to wait for the interest rates to fall to at least 5.35% and prices to drop another 8%" Now according to a Walter Molony a NAR spokesperson, the next 6 months of 2008 will be another window of opportunity to purchase. My prediction is that those in catergory B will start to see some inventory decreases in the neighborhoods they may be interested in plus some minor, yet significant price reductions will occur. Mr. Molony also predicts that the housing market will strengthen in 2009 and estimates a price rise of 3.1% that year as well. ECONOMIC ISSUES YOU SHOULD MONITOR What the Economic Stimulis Package will do for the economy Fed Rates Presidental Election For futher discussion of this topic please email Harriette at Hmozell@theozellgroup.com