Wednesday, August 23, 2006
The Slowdown is Here- how do you respond?
The New York Times made it official today- federal statistics indicate that all over the countyr, prices are droppping and the number of homes on the market are increasing. Is this good or bad news for you? How should you react aas a buyer or seller.
Sellers first- don't price houses unreasonably. if you look at the real estate transaction in the local paper, you'll see that, despiute the slowdown, houses are seeling- they will continue to do so. However, you won't be able to look at your house as a tool to generate a large capital gain- it's just not gonna happen. If you have been in your home for a number of years, it will have appreciated in value, but not as much as you might have hoped. When the market turns onto a downward trend, houses that went for $350,000 a year ago are lucky to pull $300,000. That's not great new for you as a seller.
However, if you are selling AND buying, you are still in the same position you were in before- the upgarde you hoped to make before the market turned is still possible- remeber that there are other sellers out there having the same experience. There houses will cost less to buy, ffsetting what you perceive as a loss in value of your home. Prices move across the entire market.
Mortgages are a little tougher- you can't get the same interest rates that you found a year ago, so you may end up paying a little more per month. Emphasis is on "a little" though. Remember again, $20,000 extra financed only comes down to less than $200 a month more, and interest rates will come down, making refinancing an attractive option in the near future.
So go ahead- sell the house, or buy the house- you'll be fine. Ultimately we are simply talking about numbers on documents, not hard cash. If you buy right, you can make money in this market. Remember in "It's a Wonderful Life" when Jimmy Stewart told all his Building and Loan customers that Potter wasn't selling- he was buying? When everyone about you is losing their head, look for the best way to get a solid investment. Don't get greedy, but definitely buy.
No one knows where the bottom of the market is, but it is approaching. Buyers and sellers are about $30,000 apart in a lot of cases. That can be made up quickly. Make an informed, thoughtful decision on your proerties and you'll be a happy real estate customer.
Tim Hillman
tim@joedias.com
Sellers first- don't price houses unreasonably. if you look at the real estate transaction in the local paper, you'll see that, despiute the slowdown, houses are seeling- they will continue to do so. However, you won't be able to look at your house as a tool to generate a large capital gain- it's just not gonna happen. If you have been in your home for a number of years, it will have appreciated in value, but not as much as you might have hoped. When the market turns onto a downward trend, houses that went for $350,000 a year ago are lucky to pull $300,000. That's not great new for you as a seller.
However, if you are selling AND buying, you are still in the same position you were in before- the upgarde you hoped to make before the market turned is still possible- remeber that there are other sellers out there having the same experience. There houses will cost less to buy, ffsetting what you perceive as a loss in value of your home. Prices move across the entire market.
Mortgages are a little tougher- you can't get the same interest rates that you found a year ago, so you may end up paying a little more per month. Emphasis is on "a little" though. Remember again, $20,000 extra financed only comes down to less than $200 a month more, and interest rates will come down, making refinancing an attractive option in the near future.
So go ahead- sell the house, or buy the house- you'll be fine. Ultimately we are simply talking about numbers on documents, not hard cash. If you buy right, you can make money in this market. Remember in "It's a Wonderful Life" when Jimmy Stewart told all his Building and Loan customers that Potter wasn't selling- he was buying? When everyone about you is losing their head, look for the best way to get a solid investment. Don't get greedy, but definitely buy.
No one knows where the bottom of the market is, but it is approaching. Buyers and sellers are about $30,000 apart in a lot of cases. That can be made up quickly. Make an informed, thoughtful decision on your proerties and you'll be a happy real estate customer.
Tim Hillman
tim@joedias.com
# posted by Tim Hillman @ 11:46 AM 
