Over the past few weeks and months, the media, so-called experts and most of our friends and relatives seemed to have almost soured on buying a home at this time. With fear of a fragile economy and high unemployment rates, who can argue with caution?
When the pervasive sentiment among even real estate and mortgage professionals is that home prices will continue to move downward and that mortgage interest rates don’t appear to be jumping significantly any time soon, the question remains… “Why would anyone that doesn’t have to buy now, buy now?”
One commenter to a previous blog post even went so far as to challenge the entire industry for promoting the “hurry up and buy” approach by asserting that buyers who listened to that advice six months ago are bemoaning taking that advice. That made me think: “Are people who bought six, eight, ten months ago kicking themselves because their home is worth less now than when they bought it?”
I had my team call some of our recent buyers and this is the feedback we received:
The inventory of future short sales and foreclosures which will be coming to the market is known as ‘shadow inventory’. Future real estate pricing will be determined by the number of these distressed properties which eventually reach the market.
These properties sell at major discounts:
A listing contract on a house for sale has a termination date. If the house reaches this date without being sold, it is called an ‘expired’ listing meaning it is no longer for sale under the previous contract. The end of June historically is a time when many listing contracts come to termination. There will be a record number of homes in this category this month as the housing market continues to struggle.
If you are one of these homeowners, you have a decision to make. Today, we will go over your options and comment on each.
The housing market has been tough. Selling a house has never been as difficult as it has been recently. Honestly evaluate the job your current agent has done. If they have been honest with their input and diligent with their feedback, you may consider extending the contract.
Everyone seems to have an opinion on where home prices are headed. Housing bulls are saying prices may start rebounding as early as later this year. Some housing bears are saying that prices may still drop another 10-15%. What actually is going to happen? No one knows for sure.
However, Macro Markets, a financial technology company, actually surveyed 108 economists, real estate experts, and investment and market strategists for their June 2011 Home Price Expectations Survey. They then averaged all 108 opinions. Here is what the report says about house prices over the next five years: