If you sit down with a Realtor explain your situation, then work out a plan together, you will win.
Also, I must have missed the letter from the National Association of Realtors asking me to post this question on bulletin boards. Seems like Rose and some of the others did get it. See, for instance, this current thread on Trulia: http://www.trulia.com/voices/Home_Buying/Why_is_no_one_buyin and this one http://www.trulia.com/voices/General_Area/Why_are_so_many_pe
Since my fellow Realtors are all posting this question, I'll re-post my answer as to why people aren't buying:
I'm a Realtor, and I'll admit I'm baffled by the comments by most of my fellow Realtors. Read Betty's comments [on the original thread]: They're real world. That's why many aren't buying. Read Jess' comments [on the original thread]: Those are your buyers, and those are the criteria they're using.
To answer a poster's question: Are the prices really good? No. They're better than they were two years ago. But just because a house sold for $515,000 two years ago doesn't make it a bargain today at $325,000. Just because a townhouse sold two years ago for $280,000 doesn't make it a bargain today at $140,000. Those are real world examples from Northern Virginia today (Annandale and Woodbridge, for those who know the area). The $325,000 property is still a dump, just 2 years older and more battered than at the peak of the bubble. The $140,000 townhouse is one of more than 2 dozen properties for sale, virtually all short sales and foreclosures, where the going price now is $95,000-$110,000. So: Cheaper, yes. A bargain: No.
And let's knock down this complaining about the media. Granted, they like to sensationalize. But the media aren't the cause of the foreclosures and short sales. The media didn't pull Wall Street's strings to come up with all the "clever" financing that led to the lending debacle. The media weren't out showing $500,000 properties to janitors and gardeners who--hardworking as they are--were earning the minimum wage. The media weren't lending billions of dollars to file clerks who used stated income loans to get $500,000 mortgages. The media weren't pushing 100% financing with firsts and seconds at 12% or 14% to people, telling them that there'd be no problem refinancing in a few months.
Meanwhile, let's look at the broader picture. The media aren't behind unemployment jumping half a percent just this past month. The media aren't behind $4 a gallon gasoline and $5 a gallon diesel. The media didn't get us into Iraq and the trillions of dollars that's costing us. The media aren't behind the airline failures. The media aren't behind the shortages in our supermarkets of rice and corn and the huge increases in bread and milk prices.
So let's stop blaming the media. Today's potential real estate buyers know better.
Sure, if buyers wait too long, the market will shift upward. So what? I've run comps for a couple of people on properties in Northern Virginia. (Woodbridge area) Prices are dropping there by $8,000-$10,000 a month. They have been since last fall. Consider the typical buyer's analysis: I wait 6 months to buy. Worst case scenario: Prices decline another $60,000. Best case scenario. Prices flatten out over the next couple of months, then begin rising (though not at $10,000 a month). So best case: Prices in 6 months might be $10,000-$20,000 higher than today. Hmmm. Let's see. Downside risk of $60,000. Upside risk of $20,000. Most likely scenario: Prices will be lower by another $20,000 or so. Buyers may not have all the facts that Realtors have, but they're not that dumb. If they wait, prices likely will go lower...maybe much lower. And if they're wrong, they're still buying near the bottom.
Interest rates? Yes, they may go up a bit. But they'll still be just fine in 6 months. It sure doesn't look like the economy is going to get so overheated in the next few months that the Fed is going to slam on the brakes.
Frankly, there are other good Realtors out there with similar perspectives on the economy. But it's not politically correct to voice them. So that's why most of the comments to this and similar postings from Realtors are likely to be along the lines of the question: "It's a great time to buy." For some, it is. For the large majority of the population, the future isn't as rosy.
Would one of you Realtors PLEASE send me that NAR memo?
This is kind of a slippery slope to be on, as i'm sure I don't need to tell you all that markets vary greatly from location to location.
Inventory is up? Actually - where I am, straight resale inventory appears to be down - short sales and REOs are up.
Interest Rates are low? Not as low as they were even 6 months ago, and all indications point to rising inflation and economic instability pushing interest rates higher over the next 6 months.
Depending on the individual market, even if interest rates are "low" the conditions lenders are putting on potential buyers are becoming more and more difficult to meet. Again, depends on the market.
In some markets - such as northern nevada - that are behind the curve in terms of price correction, i think it's safe to say the bottom has not come yet. For some buyers, that is not as big of a concern. If they have the liquidity to put up a large down payment to minimize potential loss in equity over the next few years, and if they are looking to purchase a home, not an investment - it can be the right time.
However, that same property - but being purchased by someone who wants to finance as much as possible, and hopes to dump it in 3-5 years for a profit - i think is going to have a very difficult time of things, and they would be best advised to hold off for awhile.
TIME TO BUY. WELL , NOW IT IS JUNE 08. YOU WOULD HAVE LOST ABOUT 10 TO 20 PRECENT
IF YOU BOUHT IN JUNE. ONLY JOHN FROM MORAGA HAD THE HONEST AND RIGHT ANSWER
PEOPLE, THESE AGENTS ARE SALES PEOPLE . THAT IS ALL . THEY WANT TO SELL NOW.
THEY DONT CARE ABOUT NEW YEAR.
The prices are down, most of the listings are short sales which can be a long and tedious process and foreclosures which can be difficult. We are seeing multiple offers on properties if they are priced low and most of what I have seen is going from 95% to above 100% on foreclosures.
If you do not NEED to buy you should think about it...many are saying that after November when the elections are behind us that we will see changes. BUT...no one really knows how long prices will decline.
I think it is a great time to be active and looking. Buy if the circumstances are right. Down the road, we will hear regret stories from those who did not buy; just like today we hear regret stories of people who bought at high prices and highly leveraged loans.