Here is my nod to the opportunity for buyers in today's marketplace. I have decided that I don't want to participate in the conversation that is always being had. Is now the best time to buy, where do you see home values, etc. I know that for many out there it has become a conversation that they just can't stop having. Here is my official stance:
If it's the right time to buy or sell a home you want someone you can trust to help you through the process.
True home prices are still falling. When will we hit the bottom, I just can't say. Should I really be admitting that I don't know something. I believe that it's fair to say nobody knows when the market will turn around. The only way we will know is when we are looking in the rear view mirror. Along the lines of market commentary I will post a copy of a email that I received from Gerald & Linda Carruthers Home Loan Specialists from Countrywide Home Loans
An Opportunity of a Lifetime
Warren Buffet says, "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful." While Mr. Buffet was writing about buying stocks, the same can be said for housing today.
Housing issues have permeated the economy both locally and nationally. This week, one index that tracks housing prices, S&P/Case-Shiller Home Price Indices, indicated home values fell the most since 1968, declining 18.5% in December from the year before.
Looked at from a different perspective, this means home prices have fallen to levels not seen in six to twelve years, depending on individual markets. Following the Case-Schiller report was the report from the National Association of Realtors (NAR) recently. The NAR reported that home prices for the month of January fell by 14.8%.
The bright spot though in contrast was that the number of homes sold in December increased. Home buyers from coast-to-coast have been buying distressed properties at the rate of 45% of total sales.
Recognizing that now is the time to buy, everyone - from those looking to purchase their first home to seasoned real estate investors - is buying homes today. Bruce Norris, the head of an investment group in Southern California, expects to buy at least 100 homes this year as, "This is the buying opportunity of our lifetime."
Fundamentals Point to Strength
The basic fundamentals of the housing market point to higher prices ahead. Almost half of the properties being sold today are existing homes that are either owned by banks or homes on which banks are accepting short sales, allowing them to be sold for less than what is owed.
New homes or homes under construction are near all-time lows. The country's demographics point to more potential buyers coming into the housing market than projected inventory in coming years. This all points to higher prices on the horizon as demand will be greater than supply. This is supported by the fact that the inventory of unsold homes fell 2.7% in January.
Why Buy Now?
Three very important reasons to buy now are:· Interest rates are near all time lows;
· Home prices have declined to levels not seen in years; and
• Qualified first-time home buyers are now eligible for up to an$8,000 tax credit.
Lower Prices Don't Always Equate to Lower Payments
One final point to consider. Even if you believe that home prices will continue to decline, it's very difficult to believe that interest rates will remain at these low levels. Did you know that even if home prices were to decline 10% but also during that time, interest rates available for home loans were to increase by 1.00%, your monthly principal and interest payment would actually be higher? It's true. So, if you are thinking of buying or the end of your lease is near, get busy and get in the game. To quote Mr. Buffet again, "If you wait for the robins, spring will be over."
I am not advocating that it is the best time to buy. As a matter of principle, I don't want to go there. There are personal factors that may effect your decision one way or the other, how is your job, do you have enough reserves built up, have you saved you down payment, are you planing a move in the next 3 years. This is why it is so important you to consult a trusted adviser to determine what your priorities are.
If your ready to make that move and have questions give me a call I am happy to help!
Dan Edwards - 206-818-8816 dedwards@northstone.net
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