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Fred Yancy,…, Real Estate Pro in Woodstock, GA

In your opinion, when do you see the real estate market recovering?

Asked by Fred Yancy, Broker, Woodstock, GA Mon Oct 3, 2011

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BOTTOM OF THE MARKET
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.”

The truth is, when you buy that house, any house, you are establishing the BOTTOM of the MARKET for THAT house. The clock starts on that investment. And considering that Real Estate is a long-term investment; if you can look back in five years and see that you made a good investment….

This whole controversy must take into consideration what you are buying:
If the object-of-your-affection is a Home for your family, then your priorities are skewed if you are obsessing on the Bottom-of-the-market: You are first, last and always buying a HOME for your family; complete with Security, a good neighborhood, good schools, 3 bedrooms, 1647 square feet, a wooded backyard, a 2 car garage, etc.
Sure you want to make a good buy, but that price should not be on the top of your list: Would you be happier in a crummy, crime-ridden neighborhood, with a house that is falling down, BUT, you made a great deal! Or, would your rather have the best house on the block, where you don’t have to lock your doors at night, and your schools are the best in the State, for a good price? You choose.

The last consideration is the dynamic nature of the Market: By holding out for the BOTTOM of the MARKET, you are betting that, not only do the prices continue to drop, but also that:
1.) Interest rates do not increase
2.) The house you want is still available
3.) Your financial position does not change for the worse.
Consider that if you are looking for a home at $400,000 with a loan at 5%, your monthly payments could be $2689.
If you waited for the house to go down $10,000, but the interest rate went up 1%, your monthly payment would INCREASE to $2876!
If you waited for the house to go down $20,000, but the interest rate went up another .5%, your monthly payment would now be $2935!
(these are ball-park figures; please talk to your Mortgage specialists.)
If you are determine to play the interest-rate-game; know that the current Interest Rates are the lowest that they have been since just after World War II! That’s 60 years!
But in the 80’s we had 12 and 13% home loans. (That would make that monthly payment $4,966!)
2 votes Thank Flag Link Mon Oct 3, 2011
As soon as the distressed homes are out of the system, probably 2015 at the earliest.
Web Reference: http://www.877homes.com
1 vote Thank Flag Link Mon Oct 3, 2011
For the ones that have bought it already has. For the ones waiting it is in consideration mode and that is progress.
For those who are asking the question will never know because their reasons will always outweigh the positive answers of their own negative instincts. The greatest risk in life is not taking any.
0 votes Thank Flag Link Thu Oct 27, 2011
Ron is 1000% correct. So buy today if you need a place to live or buy a 2nd home for a rental investment.
0 votes Thank Flag Link Mon Oct 3, 2011
Ron Thomas - I so agree with you and could not have said it better myself. People should realize that they are not buying a 'property' (unless you are an investor) but a home and a lifestyle. I deal with many second home people and it is truly a lifestyle that they are looking for. Fresh air, less stress, more space, etc. If you find a home you love that will give you and yours everything you all are looking for-- then you have found a bargain property. And forget what you read in the papers. Don't get caught up in the propaganda that is being fed to us; every area is different and some values have not dropped drastically. Have you noticed that the investors with the big bucks are out there buying properties? They are seeing the bargains and now a good time to buy is here.
Web Reference: http://www.buyfromdi.com
0 votes Thank Flag Link Mon Oct 3, 2011
I agree with Benjamin. Once the distressed properties are out of the system or back to normal levels, because they will always be part of the market, we will be on the road of recovery. I have been saying that for three years now. Unfortunately, helping those in trouble is not a good investment, and trust me I know how it feels to feel the pinch of hard economic times. Banks need to push through the units that can't be saved, and they should help find a way to help those in trouble. Banks would be better off doing a a deed in lieu of foreclosure and cash for keys versus the foreclosure process. It would be cheaper on every level.

Future more, I think a change in the political environment will help as well. If republicans get into the White house, the recovery will begin in late 2013.

I see an improvement in our area in Massachusetts. If the negative national press would stop, then the turn around will happen sooner. What most analysts don't get is the fact that the national housing numbers to clearly reflect the numbers in each area. The issues are neighborhood, town, state, and regional dependent. Again, I am fortunate to live in an area that is doing quite well.

Good luck to all of us.

Please put this question in a blog so we can get a good dialogue going.

Be well, and great question!
0 votes Thank Flag Link Mon Oct 3, 2011
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