Should I buy now or wait?
Lately, I have had quite a few people ask me if this is a good time to buy or should they wait a little longer. Most of these folks are from out of state, and in some cases out the country. Everyone seems to have a least a general knowledge of the state of the real estate market. We all know that the last couple of years have been tough to say the least. Anyone can spin the message anyway they want, positive or negative. I have to tread a fine line as a Realtor, because on one hand if I paint too rosy a picture, I am deemed a money grubber, looking only to sell homes so that I can make money, or as this year goes for many people, just survive. On the other hand, if I take the opposite approach, I fall right into the self fulfilling prophecy side of things. I have long criticized the big media for the approach they have taken. Sure they need to report the facts (skewed however they want for their story), but it seems to be the extra twist that is put on almost every story that scares people silly.
So, I try to be somewhat neutral. After all, I do take my duties seriously, and that is to treat my clients fairly and help them do what is in their best interest. I have turned down business before, rather than do something unethical, or that I know will harm the prospective client. My goal is to provide my clients with enough info to do the right thing, after all it is ultimately their decision, and education is key.
So, I got of on a tangent there for a bit. The question is should I buy now or wait? Obviously it depends on the individual, but I don’t have a crystal ball. I can only go by predictions and current data. Despite the dreariness of the market in 2007, it was actually the 5th best year on record for the real estate industry. Granted, it was down significantly from the previous year, which was the all time record year. But that is the key; we have had a run of successive record years. So, put into perspective any downturn will look bad. But last year was still in the top 5! The issue with the market now is that we have the highest inventory levels ever. People have been scared to buy, waiting for the low point. It becomes a vicious cycle at this point. People are waiting to buy, more homes come on the market, time to sell increases, and sellers get scared, and slash prices. So when does it end and where is the low point? The market will tell. Is this good? Yes and no. Prices are coming back to reality, but foreclosures are increasing due to poor loan choices, which also puts downward pressure in pricing. We are approaching market equilibrium as buyers start to feel that the bottom is near, and sellers get more realistic about their homes value.
My personal opinion is that this is a good time to buy. It may not be for everyone. If you are considering a purchase, look at the market. If you want to ride a wave, it is best to get in front of it, not wait for the peak, as you will surely miss it and have to wait for the next one. In other words, we may not be at the absolute bottom, but we are probably close. Once that wave hits (the bottom price) the pent up demand will show it’s force and inventory will start to clear out. That may take all of 2008, but do you want to ride it or wait for the next one, as it might be smaller.
In all of the ups and downs in the market over the past few decades, never have the interest rates been this low in a time of normalization. (You might use a different word than normalization, like adjustment, or correction, or crash for the more negative types). For someone looking to wait for the absolute best timing, consider that if you are able to get a property for a little less in a few months, but the interest rates go back up, then you have probably washed out anyway. Rates will not remain this low forever. Anyone remember the 1980’s! The rates were high and we still recovered. Conditions are right to allow for the recovery.
So, do you take my word for it? I should say not. My name is not E.F. Hutton, not everybody listens when I speak. But you should study the market and look for the right data. Also, everyone has an opinion. Whether you like the man or not, Donald Trump has made a killing determining the right timing in the real estate market, and he says now is a good time to buy. Other ’analysts’ have joined in as well, although they are still drowned out by the negative stuff. But here is the key- we are starting to see some big time people say BUY. To me that means that the turnaround is just about on us. What does that mean to you?
Adam Tarr, ABR, ePro, Assoc. Broker
RE/MAX Excalibur
Scottsdale, AZ
480-483-3333
info@WeAreAZRealEstate.com