Well, it is that time of year, the market is really scary for sellers! Buyers however are in the
catbirds seat for at least a couple of months.
The holiday time frame is upon us and there is a real shift in buyer
activity during this time frame. Relo activity
is virtually non existent and sellers are limited to move up and first time buyers
only. Thoughts turn to Thanksgiving and
Christmas and real estate gets put on hold until the new year. Many buyers opt to
wait until spring thinking they can find the “perfect” house then. Smart buyers however catch the market today !! Those
sellers that wanted to sell but didn’t have to are coming off the market. Those that have to sell though have to get
aggressive in their pricing to have any hope of getting sold before the new year. (Yes, I know there are some exceptions to
this but for the majority this is a fact of life). For sellers, new year is even scarier this year with
the threat of budget negotiations shutting down the government once again and
the fear of rising interest rates. For
buyers though now is a golden opportunity, this is the time to strike. Sellers that are on the market now are
marinated as well as motivated and by that I mean they have come through the
selling season and they did not sell (marinated) and they know they have 2-3 months of dead
market ahead of them (motivated). The
optimism they came into the market with is gone and reality has set in and a
bleak future is in front of them. For buyers one
difference this year is that inventory levels are higher than they have been in
the recent past due in part to the consumer confidence crisis the shutdown
caused. So rates are low, there is
inventory to chose from and pricing is at its low point. Prices are still higher than they were at
the start of the year but they are lower than they were at the peak of the
market in May. i.e. in 2012 home prices
appreciated an average of 3.4% for the year.
In May of 2012 they were almost 7% then they slipped back 3%+ in the
last 2 quarters. So, over all
appreciation for the year, BUT better prices in the last quarter than in the
first two quarters (for the most part).
The time to act is now though as that will change as soon as we get past the holidays. New listings that come on in
the new year come on very optimistic and by that I mean they are priced
higher. They have great market time in
front of them and they have time to “try” for a higher price and still catch
the spring rush if it does not work out.
Relocation pops into the market and they start buying and that kicks the
market off so one price builds on the next until eventually inventory catches
up with demand in May-June once again. Then
we see some slip back. We saw rates slip
up a full percentage point in 2013 and the feeling is that will happen once
again in 2014 so all the more reason to not let this opportunity pass. Do the math and see what a 1% increase in
mortgage rates costs you in purchase power.
Do the math and see what 3.5%* appreciation cost you in purchase
power. Taken individually it is
noteworthy but combined it is substantial.
The “ paralysis of analysis “ comes with a price but this year it is a
much more obvious choice. If you cannot
find the right value now there will be more homes to chose from in March but they will be at a higher price point than today and there will be
competition. It is also highly likely
that they will come at a higher interest rate as well. Would of , could of, should of!! You already lost ground in 2013 don’t let
that happen to you in 2014 again.
