Halloween is not the only Scary thing this year!

       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.