i turn REALTY into REALiTY

Buy Now!

In my last post about strategic defaults, I promised to explain why now is a good time to buy a home. If you watch the news, you’ll find conflicting reports everywhere. Some reports claim that the market is still in a downward spiral, and isn’t expected to recover for another few years. Other reports claim that the market has indeed rebounded and is now slowly on its way back up.

I’m not going to delve into deep statistical explanations but rather offer a few meaningful stats and some anecdotal evidence of my claim.

In a press release from the NWMLS (Northwest Multiple Listing Service) dated today, some stats were disclosed. In a nutshell, the numbers showed that while the market is down slightly from last year in terms of Pending sales of homes in January, the figures were within 5% of 2010’s figures. If you believe that President Obama’s housing tax incentives propped up last year’s numbers, then the actual number of REAL sales based on buyers’ optimism has increased over last year’s numbers.

The number of CLOSED sales increased modestly by 2.7%, but the prices were down 6.7%. This means that buyers got better deals on their homes (can you say BUYERS MARKET?). Prices remain at pre-2005 levels due to the influx of short sale and REOs (Bank Owned Homes) that are slowly being released into the market. This “Shadow Inventory” will lengthen the delay of recovery in the housing market, but create further opportunity for qualified buyers. (I’ll talk more about how this shadow inventory affects the overall market in my next post).

Interest rates remain low and while it may be a bit more difficult to obtain financing (You’ll need to do more than just fog a mirror), qualified buyers are finding some good bargains out there. Rates are hovering around 4.5-5% which is pretty darn good!

I’ve been working with an investor couple who understand this opportunity. In their words, this is the “Perfect Storm” in real estate. Of course, they are thinking long term (10+ years holding time). For example, we looked at a cosmetic fixer which is listed at $209,000 (4bdrm, 2bath rambler on 1/3 acre). This is NOT a home they would live in, but as a rental, it pencils out pretty good if they can pick it up for the specific price they have in mind.

As a Realtor, I’ve seen some great opportunities out there. Many are diamonds in the rough, while some are just the rough… Yes, you’ll need to have vision (and some handyman skills), but for those savvy buyers, things are looking pretty good right now…

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