Acting Today or Waiting for Tomorrow?
May 23, 2011
The real estate market of 2011 seems to be in a stand-by mode. Sellers who are considering putting their homes on the market keep waiting for signs that prices are improving. Buyers who are wanting to purchase a home are waiting for the market to "bottom-out" . In my 35 years as a real estate agent, this is my first experience of this hesitation to act. In prior real estate slumps, sellers and buyers seemed more willing to act. Buyers looked for a property that met their lifestyle needs. Sellers pretty much acted on the same motivation - either moving to a larger home or a smaller home. If the financial parameters were satisfactory, they acted.
Perhaps what has changed is the information that is instantly available to both buyers and sellers. Web sites and traditional media offer op ed pieces that either predict doom and gloom or predict better times just around the corner.
Acting today allows the consumer to decide based on what is the real estate market today. For buyers it is the lowest interest rates of decades. It is prices at 2001-2002 levels. It is still the availability of an FHA 3.5% down payment. What more information can be needed to act?
For sellers, the data is grayer. Prices are at 2001-2001 levels. If a seller waits will they be better next year? Should a seller who needs to make a move rent until prices do improve (Perhaps 4 or 5 more years). Should a seller just wait?
Acting now allows a seller to have the use of whatever equity may still remain.
Acting now relieves the seller of the responsibility of maintaining the property.
However, many sellers have negative equity. Will they have to put money into the transaction in order to close a sale? Or will they attempt to negotiate with a bank to do a "short sale" and move to a rental? Sellers who are in a position to choose, find the choices unpalatable.
The past two years have somewhat shown that waiting may not be the best decision. Acting to meet either lifestyle needs or financial needs can alleviate some of the present day's uncertainties.
The real estate market of 2011 seems to be in a stand-by mode. Sellers who are considering putting their homes on the market keep waiting for signs that prices are improving. Buyers who are wanting to purchase a home are waiting for the market to "bottom-out" . In my 35 years as a real estate agent, this is my first experience of this hesitation to act. In prior real estate slumps, sellers and buyers seemed more willing to act. Buyers looked for a property that met their lifestyle needs. Sellers pretty much acted on the same motivation - either moving to a larger home or a smaller home. If the financial parameters were satisfactory, they acted.
Perhaps what has changed is the information that is instantly available to both buyers and sellers. Web sites and traditional media offer op ed pieces that either predict doom and gloom or predict better times just around the corner.
Acting today allows the consumer to decide based on what is the real estate market today. For buyers it is the lowest interest rates of decades. It is prices at 2001-2002 levels. It is still the availability of an FHA 3.5% down payment. What more information can be needed to act?
For sellers, the data is grayer. Prices are at 2001-2001 levels. If a seller waits will they be better next year? Should a seller who needs to make a move rent until prices do improve (Perhaps 4 or 5 more years). Should a seller just wait?
Acting now allows a seller to have the use of whatever equity may still remain.
Acting now relieves the seller of the responsibility of maintaining the property.
However, many sellers have negative equity. Will they have to put money into the transaction in order to close a sale? Or will they attempt to negotiate with a bank to do a "short sale" and move to a rental? Sellers who are in a position to choose, find the choices unpalatable.
The past two years have somewhat shown that waiting may not be the best decision. Acting to meet either lifestyle needs or financial needs can alleviate some of the present day's uncertainties.
posted by shirley harry at 8:06 AM
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