Sluggish Times Equals Opportunity

October 11, 2008

These are uncertain times for home buyers and sellers, to say the least. But tough times sometimes bring exceptional opportunities. That applies to today’s buyers. Home prices, sales volume and mortgage interest rates are all exhibiting volatile behavior. In recent months, existing home sales showed a healthy gain in July, but declined 2.2 percent in August, according to a report from the National Association of Realtors.

Within the past month, mortgage interest rates dropped well below the benchmark 6 percent level, only to jump over that mark in late September. Home values are bouncing up and down in regional markets. While many prospective buyers remain on the fence waiting for the market to return to a more normal status, others are taking advantage of current conditions to make advantageous home purchases. Prices have dropped in many areas and outstanding bargains are available, particularly with distressed properties. The national median price for all types of existing (previously owned) homes is down by 9.5 percent from last year, according to NAR.

There is a large inventory of homes to select from, and mortgage rates are still at low levels, even though they are rising at this point and mortgages are becoming more difficult to obtain. Both builders and individual owner-sellers are more inclined to be receptive to negotiation of price and terms in today’s market. Many individuals who have decided to act now in their search for and purchase of a home do so because they believe mortgage rates will continue to rise and loans will become more difficult to obtain. Also, they foresee home bargains disappearing as the market stabilizes.

Posted in Real Estate