The Greatest Time to Buy or Build in Decades

Well…slowly but surely the news is beginning to trickle in. Seems that what I was saying in August is now beginning to be reported in the news. Check out this article that was recently released by Bloomberg news: http://www.bloomberg.com/news/2010-09-19/home-sales-in-u-s-probably-rose-in-sign-real-estate-market-is-stabilizing.html . I’m betting that there will also be some upside news to home values, rather than a drop as has been predicted by everyone. I’m not just guessing here, I am actually looking at the average sales price of what sold in August in our area. During the tax credit days, the majority of homes being sold were smaller, less expensive homes. That was borne out across the Country, not just in our area. I suppose potential buyers of higher end, more expensive homes, needed more than $8000 to get them off the fence. But for buyers of homes up to $250,000, it was just the bump that was needed to get buyers going. The result though, was a skewed statistic that showed average sales prices dropping, when all that was really happening was a move toward smaller, less expensive homes. Now, with most of those smaller, less expensive home sales pulled forward because of the tax credit, it appears that the folks who are now buying are purchasing more median priced to upper end homes. I expect our median home value in our area to rise from the $210,000 range, to nearly $230,000, based on the sales I am seeing. Don’t get overly tied up in that number though, because remember that the jump is all about the type of buyer who is currently in the market, just like the drop last year was all about the same thing. And, as far as a glut of foreclosures pushing prices down, don’t believe everything you hear. Banks are not about to put all those foreclosures on the market all at once. The foreclosed homes are on their books as an asset at the moment. Once they are sold at a loss, the bank has to record that loss. If the bank is well capitalized, and can afford to sit on the house a while, they will prefer not to sell; knowing that overall, waiting to release foreclosures into the market at a trickle will eventually help to sustain the value of their asset. Seems that a lot of people share my view, check out this article from MortageLoan.com http://www.mortgageloan.com/most-think-housing-market-has-bottomed-out-fannie-mae-7888 .

I’ve been hesitant to stick my neck out on this, but now it is pretty obvious, the housing market is stabilizing, which means that if you plan to buy a home, or build a home, now is the time to do it. This time next year, prices will be higher, and interest rates will likely be higher. If you can’t afford to buy or build right now, then by all means, don’t. Be deliberate in what you do. But, if you have the money, or can get the credit, and building or buying makes sense for you right now, then do it. Don’t fall prey to the daily news shows that try to always spin things negative, because they know that “negative” sells better. Don’t miss out on the greatest opportunity to own a home that we have had in this Country in decades.