It’s a Buyers market — Or is it? – by Ashley Leigh

25 06 2010

I continue to hear the same refrain from the same group … the news media, the neighbors at the local coffee shop, and especially potential buyers … “It’s a buyer’s market”. I am sure you hear the same thing.  Everyone seems to be saying it is a buyer’s market. 

What is a “buyer’s market”?

The general definition of a buyer’s market is that the number of houses on the market is greater than a six month supply. This means at the current rate homes are being purchased versus that number currently on the market it would take at least six months for them all to sell, without even considering the fact that more homes come on the market each day to help keep this delicate balance. 

The folks saying it’s a buyer’s market also say the benefits for buyers are rock bottom prices, a wide choice of homes, and besides, the seller will even pay closing costs. Wow, why isn’t everyone running out and buying if this is the case?

Well, actually, many people are buying at this time and making good purchases. Prices have come down a fair amount in the last two years and interest rates are still quite low. Yet, a number of potential buyers are playing the waiting game. What if prices drop more? They have heard (again from the sources above) that interest rates will go down as well. 

Things have been changing.  But, not quite as the potential buyers have been hoping. For example, interest rates went up 1% recently!  Will they go down again?  You and I know that if people really knew the answer to that question they would also be buying stock at the lowest point ever and always selling at the top.

Another recent change is that with many homes on the market at great prices already, we have been seeing a number of cases with multiple offers for the same property. These are good solid offers where those real buyers are not asking for help with closing costs. Buyers that have been waiting and thought they couldn’t lose now are finding out they can’t have the home they had their eye on. 

So, for those buyers, it is back to the streets with their Realtor® looking for a property to make an offer on. There are lots of homes to choose but sellers are starting to see that things have picked up and many aren’t willing to “give” so much outside of price.

Another thing buyers must consider is that if they are looking to take advantage of the First Time Home Buyer Tax Credit they need to close by December 1, 2009.  Keep in mind that if the property they want is a short sale this deadline may be in jeopardy due to the long buying cycle typical with short sales.  Or, the short sale may not get approved and then it is back to the streets again with their Realtor®. 

All this said and done, there are still some phenomenal buys out there and even if interest rates are 6%, that is better than most people alive have seen in their lifetime. 

So, now is the time for action.  Buyers, yes, YOU, its time to get off the fence and get in the game.

  • Get pre-approved by your lender if you haven’t already
  • Check out the down payment assistance programs such FHA loan programs
  • Meet with your Realtor® and make sure your expectations have a dose of reality in them.
  • And lastly, enjoy the journey. This is an exciting time and if you aren’t enjoying it you have the wrong people on your team. 

So, it may be a buyer’s market but its not a buyer-take-all market!

Call me today to get started.

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