Is Now THE Time to Buy? -Ann Timoney, author
Is Now THE Time to Buy?
Below is a good article that answers part of a BIG question that I have been asked relentlessly, by not only my clients, but other curious house hunters ..."Is now the time to buy or should I wait another six months (or more)?"
Of course, the question has to be answered uniquely for each individual, but let's just say your answer is YES to the following questions: a) Are your finances in order - good credit, ample downpayment, ability to take on a new mortgage per tighter lending guidelines? b) Do you have a Realtor(R) you have partnered up with who will guide you every step of the way to ensure you are avoiding the riskier deals and also spotting the good ones? This is after all a huge investment. c) Are you free from any other show-stopping debts? ie: you don't have to first sell your home in order to put the down payment on the purchase (average days on market is up to 55 and 56 days for single family homes and condos, respectively) and d) Do you want the potential to start making money for yourself, not your landlord? Rents have also increased in the Santa Clara County as much as 12.2% according to the LA Times.
Generally speaking, the two biggest changes that we've seen in the Santa Clara County are a slowdown in the sales pace, down 35% from October 2006, with 15.7% of the listings currently pending (also down from 38% in October 2006) - which means there are more sellers out there, many in very unfortunate situations, desparate to sell before it becomes the bank's property. That said, inventories continue to head north with over 8 months of inventory at the current sales pace. Different from the rest of California and the rest of the nation for that matter, while prices in some pockets are adjusting downward, the median price in the County is still moving north due to a stronger high-end market. The median price year over year rose 9.9% to $861,000 for single family homes and a noted rise in condo prices of 7.7% from October 2006 to $527,500, telling us that sales currently are more volatile than prices.
My approach is to never advise my clients to do anything that I wouldn't be doing. The fact is that in most cases, the properties that are priced well, in good condition, in a good location where a good or great school system exists - those properties are selling. If you don't want to be comparing every property to the one you missed out on, go for it. In another six months, I predict that we'll begin seeing more and more buyers on the playing field. If you are well positioned to make the purchase, go in with reasoning for your offer, wherever it may be, and do it now rather than waiting for the competition to change the rules of the game. Talk to me if you'd like to discuss further by emailing calling, texting or IMing. I can also connect you with my partner in lending to find out if you are qualified. ~ Jessica Bell
Buy Against the Herd
The opportunity to move against the herd is in front of us right now.
Common sense tells us to buy when rates are low. Sounds reasonable, right? But lets take that thought furtherand see where it leads.
If we accept that common sense tells us to buy when rates are low, then:
Common sense tells us to buy when there are the most competitors because common sense by definition means that most everyone will arrive at the same conclusion.
Common sense tells us that if we are to get the house we want, then we must outbid every competitor who is bidding on that house.
Remembering the principles of supply and demand, we know that this will drive the price higher. This must sound familiar to those who have been in the Bay Area real estate market over the past few years and who have routinely witnessed 10 to 15 offers on homes for sale.
Now that rates are higher relative to the last five years, common sense is that maybe buying right now is not such a great idea. If common sense is telling you to not buy now because rates are higher, then:
Common sense is telling you not to buy when there are fewer competitors and less pressure for a house price to be bid up
Common sense tells you to sit on the sidelines when it is a buyers market.
It seems that common sense leads one into taking actions that have them compete with the most bidders and to sit on the sidelines when there are fewer bidders.
Might it be better to buy when rates are high and there are fewer competitors? We always hear that it is more effective to not follow the herd and we see an excellent example of this in todays higher interest rate market.
The borrower always has the option to refinance if rates drop. This gives buyers the opportunity to buy a house where there are fewer competitors and then to lower the costs later if rates decline.
Some buyers cannot afford or qualify for loans at the higher rate. This is good news for those buyers who can afford and can qualify. This is what it means to have fewer competitors. Some will choose to not buy because of higher rates and others will be forced out of the opportunity by the market mechanisms at work.
Talk with your Realtor® to get specific grounding about what is happening with properties in the area where youd like to buy. Are the days on market increasing? Are there multiple offers or are properties selling to one offer?
Perhaps going against common sense will enrich you in ways you never expected.
If there was ever an opportunity to move against the herd, it is in front of us right now.
Below is a good article that answers part of a BIG question that I have been asked relentlessly, by not only my clients, but other curious house hunters ..."Is now the time to buy or should I wait another six months (or more)?"
Of course, the question has to be answered uniquely for each individual, but let's just say your answer is YES to the following questions: a) Are your finances in order - good credit, ample downpayment, ability to take on a new mortgage per tighter lending guidelines? b) Do you have a Realtor(R) you have partnered up with who will guide you every step of the way to ensure you are avoiding the riskier deals and also spotting the good ones? This is after all a huge investment. c) Are you free from any other show-stopping debts? ie: you don't have to first sell your home in order to put the down payment on the purchase (average days on market is up to 55 and 56 days for single family homes and condos, respectively) and d) Do you want the potential to start making money for yourself, not your landlord? Rents have also increased in the Santa Clara County as much as 12.2% according to the LA Times.
Generally speaking, the two biggest changes that we've seen in the Santa Clara County are a slowdown in the sales pace, down 35% from October 2006, with 15.7% of the listings currently pending (also down from 38% in October 2006) - which means there are more sellers out there, many in very unfortunate situations, desparate to sell before it becomes the bank's property. That said, inventories continue to head north with over 8 months of inventory at the current sales pace. Different from the rest of California and the rest of the nation for that matter, while prices in some pockets are adjusting downward, the median price in the County is still moving north due to a stronger high-end market. The median price year over year rose 9.9% to $861,000 for single family homes and a noted rise in condo prices of 7.7% from October 2006 to $527,500, telling us that sales currently are more volatile than prices.
My approach is to never advise my clients to do anything that I wouldn't be doing. The fact is that in most cases, the properties that are priced well, in good condition, in a good location where a good or great school system exists - those properties are selling. If you don't want to be comparing every property to the one you missed out on, go for it. In another six months, I predict that we'll begin seeing more and more buyers on the playing field. If you are well positioned to make the purchase, go in with reasoning for your offer, wherever it may be, and do it now rather than waiting for the competition to change the rules of the game. Talk to me if you'd like to discuss further by emailing calling, texting or IMing. I can also connect you with my partner in lending to find out if you are qualified. ~ Jessica Bell
Buy Against the Herd
The opportunity to move against the herd is in front of us right now.
Common sense tells us to buy when rates are low. Sounds reasonable, right? But lets take that thought furtherand see where it leads.
If we accept that common sense tells us to buy when rates are low, then:
Common sense tells us to buy when there are the most competitors because common sense by definition means that most everyone will arrive at the same conclusion.
Common sense tells us that if we are to get the house we want, then we must outbid every competitor who is bidding on that house.
Remembering the principles of supply and demand, we know that this will drive the price higher. This must sound familiar to those who have been in the Bay Area real estate market over the past few years and who have routinely witnessed 10 to 15 offers on homes for sale.
Now that rates are higher relative to the last five years, common sense is that maybe buying right now is not such a great idea. If common sense is telling you to not buy now because rates are higher, then:
Common sense is telling you not to buy when there are fewer competitors and less pressure for a house price to be bid up
Common sense tells you to sit on the sidelines when it is a buyers market.
It seems that common sense leads one into taking actions that have them compete with the most bidders and to sit on the sidelines when there are fewer bidders.
Might it be better to buy when rates are high and there are fewer competitors? We always hear that it is more effective to not follow the herd and we see an excellent example of this in todays higher interest rate market.
The borrower always has the option to refinance if rates drop. This gives buyers the opportunity to buy a house where there are fewer competitors and then to lower the costs later if rates decline.
Some buyers cannot afford or qualify for loans at the higher rate. This is good news for those buyers who can afford and can qualify. This is what it means to have fewer competitors. Some will choose to not buy because of higher rates and others will be forced out of the opportunity by the market mechanisms at work.
Talk with your Realtor® to get specific grounding about what is happening with properties in the area where youd like to buy. Are the days on market increasing? Are there multiple offers or are properties selling to one offer?
Perhaps going against common sense will enrich you in ways you never expected.
If there was ever an opportunity to move against the herd, it is in front of us right now.
posted by Blue @ 7:00 AM
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