Get in while the Getting's Good - Why Buyers and Sellers Should Take Advantage of Today's Real Estate Market2/22/2011
In some markets, sales were the worst everas the report noted: While the composite housing prices are still above their spring 2009 lows, six marketsAtlanta, Charlotte, Miami, Portland (OR), Seattle and Tampahit their lowest levels since home prices started to fall in 2006 and 2007, meaning that average home prices in those markets have fallen beyond the recent lows seen in most other markets in the spring of 2009. This may make buyers complacent, expecting prices to go down further. And if youre a seller, your immediate reaction might be to hide under the covers.
But all may not be so negativein fact, quite the contrary. For one, Case-Shiller numbers, when they come out, have a lag time of several monthsthe aforementioned batch covers through October. Since then, a lot of positive things have happened. For one, strong consumer holiday-shopping showings boosted big retailers across the country, making it the best shopping season in years. A rising stock market and tax-cut extension has also made folks a little less nervous to open their wallets. And, while unemployment is still a problem, there is some good jobs news as wellinitial jobless claims fell to 388,000 for the week ending Dec. 25, down from 422,000 in the prior week (the first time its gone below 400,000 since July 2008).
Its because of reasons like thisincreased consumer confidence and slight lessening of fearthat you shouldnt count on home prices dropping more. Part of it is psychological: If people see the financial and retail markets go up, signaling that the bottom in this particular financial cycle has been reached and things are moving upward, that creates more interest in buying big-ticket items, like homes. Its normal for a buyer to start rationalizing things this way: If the economys starting to improve, this house is going to wind up costing much more at some point. Id better get in the door now, so I dont miss the boat.
Yes, there are still plenty of problems. Not just rampant unemployment (despite initial jobless claims numbers), but also a high number of foreclosures, a crowded inventory landscape and mortgage rates that are anything but friendly. But these factors could, ironically, be a sign to buy. For instance, when interest rates go up uniformly over time as they have been, people develop a bite-the-bullet mentality, thinking: Id better buy now even though theyre high, because it doesnt seem like theyre going down any time soon.
This mentalityof getting in before things move upis something to think about if youve been considering selling. Get your home prepared to sell by having a professional home inspection and fixing major problems that could be impediments to buyer interest. And for buyers: Buying a home is an individual process with many factors at play, so its impossible to say that its the ideal time for everyone to buy. But for many buyers, a simple saying may very well hold true: Get in while the gettings good.