HAS THE REAL ESTATE MARKET HIT BOTTOM?
INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS
September 2nd, 2008
I’m asked this question almost daily. Family, friends, fellow Realtors, affiliated real estate business professionals-title company reps, escrow officers, property inspectors, loan officers and, of course, clients are asking what my crystal ball says. The short answer is I don’t know. If you find somebody that says they can predict the future, I would like to meet him or her.
We can and do look at the numbers. We have all kinds of numbers. How many homes are for sale, how many are pending, how many closed, average days on the market, year-to-year price changes, how many borrowers are in default, how many have payment delinquencies, consumer confidence level, etc,etc,etc. We can plot these numbers over time and look for trends, then try to predict the future. Don’t bet the farm on these forecasts!
If the objective is to time a buying decision, good luck! No one predicted the peak of the market, although many so-called experts were predicting a bubble burst years ahead of the actual bust. It wasn’t until late 2006 that economists pegged the market peak as being September 2005. Likewise, the only way we will know when the market has hit bottom is after it has started going up for a sustained period of time-say 6-9 months.
By then, a buyer who was waiting has missed the bottom and will now be competing with buyers that also waited. The understandable concern buyers have is an immediate drop in value of their major purchase. I would advise any buyer that is planning to hold the property only for a year or two to wait until the market is on the way up. If this is a long term investment, buy before the year is out. Interest rates are low, selection is vast and concessions are common.
Realize there is no national housing market. The numbers quoted by mainstream media are national averages. They have little relevance in local markets. Take the time to research listings online and view a large number of homes to educate yourself on market values. The more knowledgeable you are, the easier it is to spot a deal when it is presented to you. Keep in mind when people start showing signs of optimism, that could signal the bottom of the trough. After all, the bottom is proceeded by a period when things stop getting worse. Then the market starts looking a little better. The tables can turn quickly, and before you know it, negotiability evaporates and sellers dig their heels in.
Consumer confidence is on the rise, sales are picking up, interest rates are declining, bank foreclosures are being absorbed rapidly, the government is intervening to resuscitate the real estate mortgage industry, mortgage workouts are gaining traction and federal tax credits are available for first-time buyers. Speculators will find it difficult to muster the courage to jump into today’s market.
If you have questions about buying or selling in today’s market, contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
