For years now, Realtors (including me) have been telling home buyers that NOW is the right time to buy (try to find now in your calendar, kind of like "soon", or "today"). "You've got to live somewhere, and you don't want to rent do you?" In our heart we want to believe we are offering the best advise for our clients, it wasn't just to transact another sale. To be fair, we haven't seen one of these style recessions before, this one was different. Realtors aren't clairvoyant, we haven't the advantage of having perfect perspective, who does? When we told our clients that it was time to buy, we believed it, and we took our own advise. Who would have thought that this Great Recession we've all come through would have had such a devastating effect on so many homeowners and last as long as it did?
We have to be optimistic and believe in what we are telling our clients--we really do want the best for them, and yet each of the last four years has seen home prices that continued to fall. What about NOW? Is it a good time to buy? YES, ABSOLUTELY! We have come through the longest and deepest housing crisis since the Great Depression and now, in 2012, if you don't buy this year, you will look back and say "What was I thinking?" This year--2012--is THE INTERSECTION WE'VE BEEN WAITING FOR--it's here NOWIs it your time, are you ready? Is your dream house waiting for you to get pre-approved and call your Realtor into action?
Why is this NOW different? Today home values have corrected to values not seen since 2003-2005, depending on what part of the country or you're in. Will prices go lower, possibly but not as likely, and the odds don't favor further downtrending of home values. Why you ask? Because inventory is tightening to the point of creating competition amongst buyers for homes! We have the best values we've seen in AND the lowest interest rates, and the smart buyers know this and they are out looking. Don't be left behind! Should prices trend lower, will we miss the interest rate window of best timing?
Homebuyers should be advised that for every one percentage point the loan rate increaes, that means your home price would have to be 10% less to approximatly equal the same payment amount for which you were qualified, using normal guidelines and a 20% down payment.
What about a good selection of inventory? Homes for sale in Bellevue WA and the surrounding Eastside communities have dwindled compared to inventory levels of the last several years. This gradual tightening supply of homes has gotten to the point where multiple offers are happening in many of our neighborhoods. We are seeing between 2-4 months supply of homes at current absorption rates. We define a buyer's market as having 0-3 months of inventory. Similarly, homes for sale in Clyde Hill and Medina neighborhoods are in very tight supply. Market times have come way down, to a point of selling on the first weekend!
So, my advice is simple. Call your Realtor, find one you can trust and who knows the market where you want to buy, and get pre-approved through the lender he recommends, and start shopping!