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Rich Tehrani, Home Buyer in 06902

When we see a bottom in the real estate market?

Asked by Rich Tehrani, 06902 Thu Jan 26, 2012

Specifically in Fairfield County, CT, Stamford, Darien, Greenwich and Norwalk.

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Joe Balestriere’s answer
Agent of Reality,

When rates rise, prices will rise. Not because rates are rising, but because of WHY rates will rise. Rates are directly linked to the general market (i.e. unemployment figures, positive political moves, increase in GDP, etc), and if, for example, the stock market rises, rates will rise as a result. Sure the market may take time to adjust, because the housing market is last to recover, but prices will still increase over time. If Rich plans on buying and selling in a short period of time, then maybe he will see lower prices; but the long term will see an increase (5-7 years).

I like to think that if the Fed decides to FINALLY increase rates again from the 0%, then lending requirements will loosen. Currently, banks are unable to make the margins that they were when rates weren't at 0%, and as a result are more strict in their lending. So when these rates do rise, and Bernanke has some sense talked into him, the housing market will benefit; it may take a while because these things don't happen quickly, but it WILL HAPPEN. Again, these rates rising will be a positive sign for the economy as a whole, and we will start to see consumer sentiment across the board increase. Happy consumers means more buying, more buying means a stronger economy, and a stronger economy means a better housing market.

It is your type of thinking that is keeping the real estate market down. If buyers weren't so scared of making the big move, we would already see a bigger uptick in contracts on properties. We are already seeing more buyers out and about, and we are certainly benefiting from sellers becoming a bit more realistic with their prices.

Stop spreading negative words like these, it doesn't help anyone. If only the question and answer was as easy as, "Ask yourself what happens when rates rise? Answer - prices will drop further." Nothing in a behemoth of an economy like the U.S. is that simple, there are just too many factors at play. I don't claim to be an economist, but I know real estate, and my gut instinct (and the facts and history) tells me that now IS the right time to buy. Keep in your hole if you don't like our opinions, otherwise, the more negativity we hear, the worse off EVERYONE who has any stake in our economy will be.

Thanks for your opinion,
Joe Balestriere
Fairfield County's Most Tech Savvy Realtor
William Raveis Real Estate
1 vote Thank Flag Link Mon Jan 30, 2012
There has been a lot of speculation and negativity about when the BOTTOM will occur.
The BOTTOM will not be heralded by a Town Crier, walking around, shouting “The Bottom has been reached!”
The BOTTOM will not be accompanied by an article in the Wall Street Journal or New York Times, announcing “The Bottom happened yesterday at 4:30”
The BOTTOM will be completely different for you, than it will be for everyone else.
The reason for this is that you will not be buying the MARKET; you will be buying one house!
There is a fixation among some Buyers, that they be able to tell everyone that they got the absolute BEST price in the world! (I’m sure you know people like this.) This obsessiveness will surely not be rewarded, because there will always be someone who got a better deal.

There is a very old saying that; “To have a good sale, the Buyer had to have been willing to pay more, and the Seller had to have been willing to take less.”
1 vote Thank Flag Link Mon Jan 30, 2012
Hi Rich--No one can give a definitive answer--but from what I'm seeing out there--there is definitely activity--more in some towns than others. And depending on where you are, how long you've been in your home and what your goals are--it might be time to list--certainly to buy. From the media sources we all see and and from some that just realtors are privy to--the Connecticut market has ticked up a bit. I hope that helps. Feel free to contact me if I can help you further.
Mary Ann Laurita, Prudential CT Realty,
0 votes Thank Flag Link Fri Feb 24, 2012

I agree that each buyer must figure it out for their own situation. I disagree with you though. The Federal Reserve has explicitly stated that the fed rate will be ultra low until the end of 2014. Given the situation, mortgage rates will not rise to 6 - 7 percent in a year or the economy will be in big, big trouble. Home purchases should always be based on income and affordability in any environment. There will be cross at some point where low rates and lower prices will make sense. I just don't feel that rushing to pay twice the 2001 price to get a 4% loan is necessarily a good idea. The foreclosure deal is going to dump a lot of distressed homes on the market in the next two years. I rent today but I have no repair bills, insurance costs and numerous other things that comes with a home. Renting is not always throwing money away. There are millions of Americans who would have been better off renting during the bubble.
0 votes Thank Flag Link Sun Feb 12, 2012
I totally agree with Sp that each buyer must feel totally comfortable before they purchase. It is absolutely an individual decision. It is important, however, for buyer's to recognize both the positives and the negatives of waiting so they can each decide for themselves. I'm hoping that no one accuses real estate agents of trying to "convince" people to buy when they are not ready, but we do have some insight into the negatives of waiting that potential buyer's may not be aware of or focus on as much as the list price of homes. Mortgage interest rates are historically low at around 4% or less depending on individuals situation. What if rates move to 5, 6 or 7% or higher in the next year or two? Buyer's usually focus a bit too much on home prices and not enough on interest rates. The difference between buying with a 4% mortgage versus a 6% mortgage is huge. What also of the cost of continuing to rent? For someone paying $1500 per month that's $18,000 gone with only a happy landlord to show for it. For someone who purchases sooner that's one more year of payments in buiding their own equity in their own home. Again- No one is trying to "convince" anyone to buy if they're not comfortable. But it is critical to be aware of all the positives and negatives and then decide for yourself what is best for you.
0 votes Thank Flag Link Sat Feb 11, 2012
I have been looking for several years. Predictions for a bottom have been going on 4 years. Lots of sellers still want twice their price from 2001. It does not make sense to me since incomes have not risen that much. With the recent foreclosure deal, I think the prices are headed lower. Rates will be low for at least two more years according to the Fed. I am seeing more realistic prices but still not there. Personally, I waiting to see what happens this spring with my eye on the fall or winter 2013. Just don't see a reason to jump.
0 votes Thank Flag Link Sat Feb 11, 2012
Usually the bottom is clearest in hindsight, ie on the bounce. But that's close enough, and I think we are close enough, to act.

Jeanne Feenick
Unwavering Commitment to Service, Unsurpassed Results
0 votes Thank Flag Link Fri Feb 3, 2012
My crystal ball says we have quite a while to go before we see bottom....
Web Reference:
0 votes Thank Flag Link Mon Jan 30, 2012
Agent of the world ending on December 22, 2012??????
0 votes Thank Flag Link Mon Jan 30, 2012
Hah, Rich..are you serious?? Go ask the banana man if it is a good time to buy bananas. Of course the answer from these NAR parrots will be yes. People are lining up around the block. Hurry now..blah blah. The market is DOA right now. Interest rates will be low for years. Ask yourself what happens when rates rise? Answer - prices will drop further. Don't be a fool for the con.
0 votes Thank Flag Link Mon Jan 30, 2012
Good evening Rich,

These guys and girls have it right. Though it is hard to predict the future, signs in the general market, and the real estate market specifically, lead me to believe we are seeing the bottom. If a new set of foreclosures saturate the market, though their presence may be stalled, this will bring prices down a bit more. This will happen in 2012.

However, regardless of this stream of foreclosures, the time to buy will never be more perfect than right now. Interest rates can't stay down forever, and certain changes in lending principles may make 2012 a year of rising interest rates.

Good luck in your decision either way!
Joe Balestriere
Fairfield County's Most Tech Savvy Realtor
William Raveis Real Estate
0 votes Thank Flag Link Thu Jan 26, 2012
We are already at the bottom Rich. Prices dropped significantly in late 2008, 2009 and 2010. But they've been fairly level now for almost one year. Real estate prices are not forecast to begin to rise again for another couple of years perhaps and then may only rise very slowly. But prices are definitely flat now and will continue to be so for some time. There is no reason to believe that after being flat they would begin to drop again. I agree with Linda and Laura that more buyer's are planning to buy this year. Don't get me wrong- There is still much difficulty in U.S. and the world economy. There will continue to be foreclosures and short sales in housing. But we prices have already bottomed out some months ago. Good luck! Mark
0 votes Thank Flag Link Thu Jan 26, 2012
Hello Rich,

I have to completely agree with Linda. Being a Faifield County agent, no one can honestly and factually answer that question. I can tell you that within the past 26 days of 2012 I personally have had more new clients ringing the phone then in the last 3 months.

As one that watches market trends closely, I have seen more homes going under deposit as well as closing at higher price tags in Fairfield County then I saw last year. Spikes do occur as this may or may not be the rise (if you are familiar with stock trading spikes are usually a great indicator of a rise).

My best suggestion is buy now while rates and home prices are at the lowest I've seen in many years.
0 votes Thank Flag Link Thu Jan 26, 2012
Hi Rich,
I'm in agreement with Linda that 2012 is looking brighter than last year. The Feds just announced that they are keeping the interest rate near 0% through late 2014. This is great news as this means mortgage interest rates will remain low.

Add in low home prices, an improving national unemployment rate, and an uptick in consumer spending confidence; I would say that we might have already hit bottom in many areas of Fairfield County. Some towns may take longer to recover than others but I believe that our county is in a much better position to recover faster than others.

I definitely believe that this is the year to buy a home.

Good luck to you!

Laura Feghali
Prudential Connecticut Realty
0 votes Thank Flag Link Thu Jan 26, 2012
Well Rich, I don't believe anyone can answer that question and know for sure what the market is going to do, but I can tell you that things are beginning to simmer a bit in the real estate market over the past few weeks and the phones are ringing for myself as well as other agents in the Norwalk area. I, for one believe that 2012 will definitely be a better year all around for us. Have faith.

It's a great time to buy. Low interest rates and rock bottom prices. It is and continues to be a buyer's buy! Do your part and help stimulate the economy.
0 votes Thank Flag Link Thu Jan 26, 2012
Also - do you think the new layoffs in CT and the financial sector means 2012 will not be better than 2011?
0 votes Thank Flag Link Thu Jan 26, 2012
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