Home Buying in Salem>Question Details

Jmatt, Home Buyer in Salem, OR

Are we too optimistic to think we won't be affected by the financial crisis?

Asked by Jmatt, Salem, OR Tue Sep 30, 2008

We are 3 1/2 yrs from having our home paid off and are looking at refinancing to provide the down to purchase our dream home. It seems like a good time to get the most house for the $. We would rent our current home until the market improves and then sell. We've been preapproved, but are hesitant to make an offer since prices continue to fall. Is it reasonable to offer a substantially lower price than the asking price in expectation that home prices are continuing to fall? Does it just depend on the individual sellers need to be rid of their home. Is there any website to help calculate an offer or guide us in the percentage prices have dropped in the last 6mo to a yr? We don't believe the financial crisis will affect our income as our industry is increasing or we living with our heads in the sand?

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Many buyers are doing what you are doing which is offering "substantially lower prices." Honestly whether or not this is a successful strategy depends on what this means for you. It also depends on what price range your dream home is in.

You say that you are in a growing industry, but growing industries need loans in order to grow. With the lack of liquidity in the current financial markets, companies are having difficulties obtaining loans, which means they can't grow. Loans are a huge part of cash flow for companies. The lack of liquidity could be the doom of many companies. No companies, means loss of jobs. Loss of jobs means loss of housing, etc.

Obviously I don't know you or your exact situation, but I would encourage you to stay put until the financial markets get sorted out. You could unintentionally be putting yourself in harms way if your company can't get access to funds to grow.

As far as market stats. I have a local Salem real estate blog that I do market condition reports. I will be doing third quarter ones here soon. Check the web reference below for that information during the first week in October.
0 votes Thank Flag Link Tue Sep 30, 2008
Hi - I just checked the current monthly reporting from RMLS and it looks like values in Marion County are down 19+%. If this works, here's a link to the full report for the whole metro area you will need to copy and paste this into your browser:

http://www.rmlsweb.com/temp%2Fdocuments%2F1500-1699%20Market…

If that doesn't work, just sent me an email and I'll reply with a good link. Another website to watch what the market is doing in pretty much any area is http://www.Zillow.com

Traditionally, as a Realtor, I would run a market analysis on a property my buyer was interested in to help us determine a fair price to offer. Right now, that's fairly difficult to do with prices dropping so rapidly. In watching what's selling here in Portland - much of what is pending/sold right now are short sales and bank repos and they are really cutting losses to close sales and get these properties off their books. That makes it very difficult for a traditional home seller like you who has worked very hard to pay their home off and build equity for their future or retirement. My sister is in the same boat you are!

What I'm hearing are rumors that it will be around 3rd - 4th quarter 2009 before we start to see values improve again - so if you are in a position to keep your existing home and rent it out awhile, you will do well. In the meantime - now is a good time to start looking for that dream home because there are some amazing deals out there. And don't be afraid to start with a lower offer to test the waters. If it's not acceptable, the seller can always counter back and all you've lost is a little time and paper to give it a shot.....especially if it's bank owned.

Hope all that helps - feel free to contact me if you have more questions or need any further help.

Kelly Gebler
Real Estate Broker & Residential/Commercial Financing Specialist
Commonwealth Group & Sunset Mortgage
503-516-1637
0 votes Thank Flag Link Tue Sep 30, 2008
I think there are many people who are stable in their jobs and their industries are growing. I dont feel you have your head in the sand, In the long run, everyone will be affected somehow. I think you need to look at other sellers and treat their price the same way you would want someone to work with you though. You would not want to put your homeon the market right now and have a buyer offer you a substantially lower price would you? That is another reason to work with a seasoned agent. They can tell you if the property you are looking at is well priced or not. No website can give you that information as it is different in any area you go to. I hope this is helpful for you. Thank you for the question.
0 votes Thank Flag Link Tue Sep 30, 2008
Great question!

Great time to make a buy!

Be poised and ready and do some deal shopping. There is a wide variety of buys out there....and there are some good ones.

The answer to the website question is no! Only a very good broker in the respective market you are working in can tell you what the market is doing at that time and place.

Look for a short sale, foreclosure, and be a buyer. There are some great homes out there and quite a few short sales are selling way below the even lowered market values.

I like the December to March time slot to buy. There are some screaming buys at the courthouse steps too but again get some help. These drastic times will not always be here and the time to strike is while we are at this bottom and not when the all clear is signaled and everyone else comes out from behind the rocks.

Best of luck to you!

Regards;

Dirk Knudsen
Re\Max hall of Fame
503-799-8383
Web Reference: http://www.nwhomecenter.com
0 votes Thank Flag Link Tue Sep 30, 2008
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