As I posted in "Time to Motivate your Sellers" in my local blog, the peak season for real estate is winding down. Sellers who are tempted to "wait until next year" need to be reminded about the effect of interest rate increases and REO inventory on prices.
Concern about inflation makes it likely that interest rates will be higher next spring. The rising number of foreclosures and NODs makes it likely that there will be more bank owned properties on the market next spring. Sellers who want top dollar need to price their listing agressively to generate offers now rather than waiting until next spring when higher interest rates and more REOs will likely drive prices down even further.
In my local market, "wait until next year" is a bad plan, unless you are willing to wait 3-5 years. What about your market? Is your local paper reporting increases in foreclosures and NODs? You can't fight facts, so you might as well make them work for you. Have a heart to heart with your sellers about why waiting for market prices to go higher doesn't make sense. Signs point to even lower prices in 2009 in most areas.
Does that mean buyers should wait until next year? Not necessarily. Interest rates determine the amount of their monthly mortgage payment, so even if buyers can purchase the same home for less money next spring, they might still end up with a higher monthly payment.
Thanks for reading!
Frank Jewett
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