A Good Time to Buy?

The 2007 National Housing Pulse Survey from October 2007, indicates that 59 percent of Americans think "now is a good time to buy".
And yet, these are the figures that are completely out of sync with logic :
= Existing Homes Sales dipped to 4.97 million in October, the lowest since 1999
= New Homes Sales counted 728,000, just off its 12-year lows
= The supply of homes on the market is now at 10.8 months

Can you believe the power of the press? Only the negative thoughts are spewed out by print and TV to fill space. And their audience absorbs it. Thus, many are missing some prime opportunities.

Yes, home values are relatively low and so are mortgage rates. What appears to be happening, however, is mortgage guidelines are getting tighter by the week. Even strong credit borrowers could well have financing difficulty as soon as six weeks from now. It looks like now is a good time to buy if you consider the strong possibility that financing may be too challenging soon for some.

Things Looking Up?

Things are starting to look up in real estate from what recent reports and the NAR indicate. It may be a temporary positive glich, but with widening credit availability and low interest rates holding steady it sure does look like a recovery is slowly under way. I’m sure this is no news to anyone in the business. Of course everyone likes a positive attitude...why not?

Conforming loans are becoming very available at historically attractive mortgage rates. There have been adjustments in pricing for jumbo mortgages, and subprime mortgages are being replaced by FHA loans.

One thing that gives the market perspective is the news that 2007 will be the fifth highest year on record for existing-home sales. 2005 was an unsustainable peak. It was overloaded with speculative buyers. These spec excesses have been removed from the market, and home sales are starting to return to normal.

NAR President Pat V. Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt, said, “Housing is still a good long-term investment, and we’ll be seeing a broad, modest improvement in home prices in 2008. With widely varying conditions, the best advice for consumers is to consult a Realtor® in their area to learn about local market conditions because supply and demand can change from one neighborhood to the next.”

Of course loans in our neighborhood are in excess of double the $417K conforming rate. (Jumbo rates are in the 7.11% range, conforming loans are in the 6.0% range.)
Jumbo loans are a little more problematic than conforming loans.

Only when the creative mortgages experienced in 2005 return (what?), will real estate return. Or, mortgage lenders would be required to follow good faith and fair dealing requirements, with a fiduciary duty toward borrowers.

Anything’s possible.

One man’s opinion.

So, Is It A Buyers Market?

Can it be described as "A market condition characterized by an abundance of goods available for sale”...a reasonable description of a buyer’s market? Is a decline in pricing reflecting a buyer’s market?

Well its a buyer’s market, or was, in terms of availability. This condition has been changing. Rather than reducing the price in the So. Bay, where pricing is all in the Jumbo Loan category, sellers are becoming holders. Its becoming a Holders Market... ‘Why sell now when I can get my price’ is becoming le mot du jour.

So in simple terms, if you can find it, buy it. And don’t overlook the historically low interest rates that are still in place. Do your homework. Determine what the going prices are and go from there. There are certainly buys to be had, but they’re not what they used to be. The buyers who are laying in the weeds waiting for big downturns in pricing are missing some good buys. I’ve sent listings to clients with $25K-$240K reductions, that did not draw a walkthrough. This is making a pass on a Buyers Market. I hope The Media doesn’t exercise the same mind control in the up-coming elections. P.T. Barnum would have had a field day.