How Deep Can You Go?
March 9th, 2008 categories: Real Estate News
If you are contemplating plunging into the deep, dark waters of real estate, you might be asking yourself: “How much further will prices plunge?” The Washington D.C. Metro area has been hard hit by the housing recession. That’s not surprising seeing that three years ago the market in the area was doing insane things. Houses would sell the same day the sign went in the yard. If a house was on the market longer than a week everyone thought there MUST be something wrong with it, and the owners would become extremely anxious about the fact their house hadn’t sold yet! Buyers had to contend with multiple offers and a lot of them would not only offer above asking price but they would forgo inspections, appraisal values and any other type of contingency.
Homes would sell regardless of their condition and they would appraise regardless of how ridiculous the price seemed. Anyone and everyone was able to obtain one of the many loans available through creative lending programs - the interest only loans became very popular and didn’t seem to deter a lot of people.
Fast-forward to present time. We are now reaping the consequences of the crazy market. The market that allowed sellers in many instances to make profits of over $100,000 in a year or less, a market were sellers became arrogantly in control has now turned into a buyers’ market. However, the mortgage industry debacle and the doom-saying from the media are keeping buyers on the fence. In the last few weeks I’ve seen at least 3 negative articles, directly or directly tied to the current real estate market , per week in our local paper, The Free Lance-Star. Any buyer would be afraid to take a plunge if they read what’s been printed. Will prices continue to drop? Has the real estate market yet to bottom out? Well, no one has a crystal ball so the truth is, only time will tell. However, I do want to point want out what the media neglects to mention. If you are thinking of buying a home and you have good credit and planning to live in that particular are for a few years - The Time is Now! Interest rates are still very low, hovering around 6% and lower, depending on the loan you get. Inventory is high and prices have dropped tremendously, which gives you, the buyer, endless homes to choose from at much better prices than in the past two years. You can also count on seller assistance in some way, shape or form. If you need closing costs assistance you don’t have to go it alone, the seller will most likely pay most, if not all of your closing costs for you. The buyer is running this show!
Pundits predict that things might start to turn around towards the end of this spring. By no means does this mean will see the market completely balanced, that’s going to take a while longer. But if things do begin to become more balanced between sellers and buyers, it might mean that the great opportunities currently available to buyers might not be there if you decide to wait for things to “bottom out”. You might wake up one morning to find that rates have gone up, sellers aren’t willing to give as much and you missed the “bottom” after all. In my humble opinion it’s a great time to buy a home!
