We've all heard the phrase, "timing is everyting" and I was struck this morning with how absolutely true it is in today's Real Estate market. Everybody wants to buy at the bottom of the market changes and sell at the top, just like the stock market. This is a lot easier to do in theory than in practice. Why is that you say? Well, even though we have the Fed telling us that we are now on the way up from the Recession, we need to keep some factors in mind:
All Real Estate is very Local. One area may be bottomed out and on the way back to recovery when another area, or market segment, is still in decline. I submit that the moderate homes, below $300K, are moving now but the listings above that number are still somewhat stagnant. I do believe that the Beaufort market overall is past the decline state and on it's way to recovery but due to the "locality rule," a knowledge of the local market is necessary to optimize a purchase.
The other factor that I see coming forth is that the Sellers are in many cases unable or unwilling to accept the curent market value of the property. Lots of owners are locked into mortgages that are "upside down" and simply can't meet the Buyer's bidded price. That means that unless there is some form of distress on the Seller's part, the Seller will most likely be staying in the home until the market returns to a level that will meet the needed sale value.
Another area of influence on the sale of property is the new rules in the area of finance. Currently, most lenders require a 20% downpayment and credit scores in the middle 600's just to qualify for a mortgage. Assuming that those requirements are met, the new changes in the rules for Appraisers have caused many deals to have to be renegotiated or even lost. One would think that the "current market value" would be defined as "what someone will give you for it" but this is sometimes not the case. If an appraiser uses foreclosed properties as "comps," the value of the subject property is diminished substantially which means that the amount the lender is willing to loan is decreased. Sometimes it works out, sometimes not. Another reason to have local knowledge available.
I could go on for a long time on the subject of the dynamics of the current Real Estate market but I'm afraid that it might begin to be boring. If you want me to revisit this subject please leave a comment, pro or con, and I'll see what I can come up with.
Remember that we were in a recession for at least 6 months before the Fed even realized, or acknowledged, the fact. So, Timing IS Everything and local info is invaluable!
BL