Realtors may be knowledgeable on current and past prices for their area, but they are NOT experts on future price trends. Realtors are NOT economists and very few have any business or economic training to speak of. They are SALESPEOPLE. The reality is that they only get a commission if you buy, so they have an incentive to be less then accurate as to their assessments. The few competent Realtors with integrity would admit that prices are going down and most buyers could save money by simply waiting for the bubble to further deflate.
I have to somewhat disagree with you. You made a blanket statement about Realtors that is not completely true. Not all agents thought it was a great market two years ago. I know few seasoned agents who believe that home prices always go up.
Some of us do have backgrounds in economics and business. My brother and I subscribe to the Economist, WSJ, Business Journal and attend economic conferences featuring real estate economists such as Elliot Pollack and Crocker Liu. We chart regional home sales, listing stats, DOM figures and price change stats. We take education and knowledge very seriously as we are called upon by our clients to help them make wise decisions.
We began giving cautionary advise to our clients in the Fall of 2005 stating that the numbers suggest the market was starting to fall. By Spring of 2006 we were strongly advising people not to buy flip or investment properties and to keep a minimum of 25% equity in their homes so they could better ride out the falling market. In early 2007 we talked most of our clients out of buying homes since the stats indicated they would likely loose over 25% of the homes value in the next two years.
It is true that some agents are just sales people and do not care about becoming experts in the field of real estate. However, that statement can be made about most every industry. There always have been slackers and achievers. Many of us wish the standards needed to get a real estate licence were much higher and that CE classes included more economics and market analysis. Someday soon I hope.
I am sorry you have had bad experiences with real estate agents. Perhaps you can move to Arizona where you can meet people like my brother and me, Jay Thompson and Steve Belt who take the job of Realtor seriously and with pride.
As we all know, real estate is local and the market goes up and down. I have only been an agent since the market downturn in 2008.
What is true for the Prescott AZ real estate market AT THIS MOMENT IN TIME, is that fewer distressed properties are on the market, that home prices ARE rising, that loan interest rates ARE rising, and that Sellers have more clout than they have had in a long while since inventory of homes for sale is quite low.
So, if you are a SELLER who wishes to sell, there are BUYERS wishing to buy at this moment while interest rates are still low and prices are still affordable. It is more of a Sellers' market than it has been in years.
If you are a BUYER who wants to stop throwing money away on rent and buy, then now is a good time to make an informed decision to buy based upon low but rising interest rates and still affordable home prices.
That's my belief and I'm sticking with it!
However, the vast majority of Realtors were spouting off two years ago that "it was a great time to buy" and "prices never go down." All this when economic indicators were rather clear that we were in a huge real estate bubble. A lot of people relied upon that advise from Realtors and have now lost their homes to foreclosure. Those Realtors perpetrated a disservice to their clients.
UrbanTeam, out of deference to you, I will modify a remark which I agree was originally overreaching. According to MOST Realtors, every day during the past 100 years was a great time to buy OR sell real estate -- and remarkably the same will hold true for the next 100 years.
Best of luck,
If you have been in your home for over 5 years & have reasonable equity, it might be a good time for you because you can take your investment earnings and re-invest into your next property. However if you bought at the top of the market or you have refinanced and taken the equity to buy non-appreciating items, you may need to spend more time in the property and ride the next wave up to gain equity for your next purchase.
Here in Utah, we have great economic numbers as far as unemployment, increasing jobs and because of the demographics and high internal population growth (that spells baby boom), our economy should continue to grow for the next several years. Our property values are not experiencing the same down turn as in other parts of the country with the exception of our resort areas. Along the Wasatch Front where the working people live, our property values have not doubled or tripled. They have just purred along with a healthy appreciation.
If you made a good decision when you bought your present property, maintained it inside and out and did not take the equity out, you should be in good shape. Interest rates are low, there is such a huge inventory to choose from and not many qualified buyers for you to compete with. Take your earnings and multiply them thru investment over the next 5 to 10 years!
He referred to the fact that sharp falls in pricing occurs rarely. The last time I remember a similar market was during the S&L crisis in the 80's. A number of friends bought during that low cycle and have profited well. One friend bought a cabin/home on the Rim for about $50,000 that is now worth in the $200,000 range. Another bought a 3000 sq.ft. home in the Phoenix Mountain Preserve for $82,000 that he sold in 2004 for $440,000.
As far as upgrading, I would be hesitant. I doubt we will see an increase in equity by upgrading for the next couple of years. Of course, adding additional square footage is often an exception especially since builders are hungry and an addition that costs $140/sq.ft. for a home valued at $200/sq.ft. will achieve a net value increase.
We are advising our clients to be cautious about remodels/upgrades and strongly urging them to maintain a minimum of 25% equity in their homes from current market value. Such a position will keep them safe if we experience further price declines.