So, You're Waiting For The Market To Bottom Out?
You really want to buy a home but you want to wait untill the bottom of the market. That's something REALTORS® hear all too often in times like these. But on the face of it, it's sounds like a reasonable idea - but how do you know exactly when hitting the bottom will happen? There is no magic formula so it becomes a tricky business and really a matter of LUCK! Now consider all the other buyers out there who also are waiting for the same thing. What is now being created is a pent-up demand for homes. All that needs to happen now is for some definitive news from somewhere that we've hit the bottom, and a huge amount of activity starts, except of course for those who continue waiting, wondering if this is really the bottom or just a pause in the downward trend. The cold hard fact is, the only real way to know is when the prices start to go up. By then we are well into recovery - and you've missed it. Typically, our down markets are reasonably short lived, so when you find the perfect home - just make an offer. The reality is that even if prices go down a little further, you are still better off at this point. Why? Because you have several advantages; * You'll have little or no competition for the house, so you are in a better position to get a better price. * You have choice, so you can find a house in a prime location that in a normal market would sell immediately. Even before you had a chance to see it. * You have less pressure to gloss over inspection problems, and the seller is more likely to accomodate you over any issues that need correction. * You won't have missed the market. At that point your position weakens because you now have competition from other buyers. You will likely pay more for the house and you may be more inclined to make concessions on the condition of the home. * You have less choice of good homes as the market heats up. Prime properties sell fast, sometimes with multiple offers. * The seller also knows that we have hit "the bottom", and is expecting prices to rise. This will raise their expectations - and the price they are willing to accept. Residential real estate is a long term investment. If you expect to stay 5 years or so, it's not crucial that you try to find the bottom of the market. House prices historically have not only always recovered, but eventually exceed the highest price they reached in the last boom market. We can remember folks saying "I'm not going to pay $160k for that 3,000 sq ft house - it's overpriced". Now several years later it's worth $550k even in this market. So if you really want to buy a home, move up into a larger home or increase your investment portfolio, now is a great time to do so, even if prices are still trending slightly downward. Do it now before we hit "the bottom", and you will be way better off in the long run. |
