If you're a seller who doesn't have to sell donâ€™t sweat it, price your home at fair market value and the home will sell. Yes, there are many out there who are looking and preying on those who are in financial troubles, if you receive one of those unreasonable offer from a bargain chaser thatâ€™s OK (they have every right to fish, but last time I checked the seller owns the home).
Buyers, itâ€™s your time to sort thru the entire inventory and take your best shot, but keep in mind that not all sellers have to sell. There is still a â€œlarge majorityâ€ of home for sale that the sellers themselves want to take advantage of the lower prices and move up; the children have left and the sellers want to downsize; the seller want to make a lateral move into a better school system, etc.
With all the new about the historic rate of foreclosures, know this, the rate of foreclosures is still about 1% of the real estate market, the big new is the prices have dropped to price levels that hard working people (proportionate to all financial levels) can now afford not that everyone is getting foreclosed on. If youâ€™re looking for the bargain house and Iâ€™ve shown 25 or so homes in foreclosure over the past couple of months and let me assure you, they are not a bargain. If you looking for a project that where to look but these homes are usually trashed, if your looking for a â€œHOMEâ€, then your best served looking at home by homeowners who have invested in and taken care of these home, that where the bargain isâ€¦favor home buyer.
Buyers have seemed to be favored with the reduced home prices and low interest rates. Our market may be shifting because we have only 2 months inventory of homes for sale. There are many buyers looking to buy and multiple offers are starting to occur. Depending how long the low inventory of homes lasts, prices may start to go up. Many believe this year the real estate market will start to recover which may help the sellers.
Prudential California Realty
Yes, prices have dropped - but with the dropping prices, more and more homeowners are holding on to thier property. There are less available homes for sale to begin with.
You see it all the time on here - agents talking about multiple offers on homes, buyers talking about being outbid and losing homes - this idea that it's a definitive buyers market i think is more hype then reality.
For most the easy and quick answer it is a buyersâ€™ market. However, thatâ€™s only considering some of the facts! Yes, housing prices have declined therefore the sale price of a house is less. However, that may be too simplistic.
Example: hypothetically the value of a house in 2007 was $300.000. During 2008 that price may have declined to $280,000. During 2007 it was possible to purchase with zero down payment and have seller pay buyersâ€™ closing costs. Today, there are few, if any, zero down financing. 3-5% is the least down payment. In 2008 a buyer may have $22,400 costs (5% down payment and 3% closing costs) they did not have in 2007. This market example does not favor the buyer!
An additional consideration: in declining markets, as identified by FNMA, many lenders are requiring an additional 5% down payment. If your original down payment was 5% the down payment is now 10%; $28,000.00 plus closing costs.
Three questions: 1) Will lending cost continue to increase? 2) Will prices continue to decline? 3) As other products such as gasoline, food and other products pressure inflation will interest rates increase to ease inflation?
In conclusion, who does the market favor? It was less costly (out-of-pocket) to purchase in 2007 than 2008 and may be more costly during 2009 even with declining prices.
Buyers also understand there isn't the same sense of urgency to buy because there is so much available. Sellers are lowering the list price in order to compete for the buyer.