We are nearer to the bottom of the real estate market than we were when 2008 started. Prices have gone down but interestingly, the number of homes that have sold has increased each month in 2008. Let me quickly point out that year-over-year, sales volume is still off if you compare quarter 1, 2007 against quarter 1, 2008. Still, prices are down, and we’re closer to the bottom of the market. Another way of looking at it is that homes are “on sale”.
When the market hits bottom, there will be an amazing rush to get in line to buy homes. Lenders will be overwhelmed with the volume of applications. Real estate agents will be in shorter supply because many have left the business due to these difficult times. Some homes will very likely be the target of multiple offers, and that will drive the prices of certain homes higher than they might normally go. Escrow periods will take longer as the real estate transaction “machine” begins to pick up speed. Interest rates may go up as confidence in the real estate market returns.
When these market factors begin to assert their presence, home prices will go up though maybe not as fast as in the previous upturn. Market forces will combine to drive prices higher than they are today. Instead of buyers’ having their “pick of the litter” at an affordable price, they may well have to settle for less than they wanted or pay a higher price due to a multiple offer scenario.
Lenders have dumper homes on the market causing excess supply and the overall demand isn’t there due to this excess…yet. It will be eventually and buyers will have a tougher time getting the home they want, for the price they want. In my lifetime, there have several occasions when I’ve said to myself, “Why didn’t I buy that property when I could have?” If you can afford to buy, or if you are an real estate agent with a client who is on the fence, it’s time to get out the prodding stick and finalize a deal on the home of your dreams. As a buyer, you’ll be happy you did because the market will come back. As and agent, you’ll have the satisfaction of knowing you steered your client in the right direction at the right point in time.
As always, do your research and understand a home’s value by reviewing prices, trends and any underlying risks in the area around the home. www.homesmartreports is one place you can look for that information.