This may be it, now

Everybody wants to know when we've reached the "bottom" of the market, the basement of all price corrections, the end...and it may be in sight. Last January I blogged about government predictions for housing prices, (see "Go, Bears!") and cited a source that predicted falling prices through the first half of 2007. We are close to June, and have seen some amazing bargains (there are still some left) out there. The same article predicted an upturn in the second half. I'm sort of an old fashioned supply and demand economist, and maybe things will remain a little soft through next year too (More babies born in the early 80's than in the late 70's, and they do grow up and buy houses), but really, the best time to buy is WHEN YOU NEED TO BUY A HOUSE. Maybe your job has changed locations, and you want to be closer to work, or you are making more money and think now is the time to get a more fabulous place. Maybe your parents finally agreed to sell their place and move in with you. Maybe you have a new baby, or are getting divorced, whatever. These are all personal decisions, that have little to do with "the economy" or "the market". The real estate market, like the stock market, has always fluctuated, reacting to increased supply, rising and falling interest rates, changes in population, and the general economy. There are bargains to be found in any market, especially now. Timing is everything...and there's no time like the present.

Thank you Money (Magazine)

On the bright side, this month's issue of Money Magazine makes some very good points about the current state of the real estate market.

1. It is a terrific time to upgrade to a more expensive house. Say you have a home worth $200,000, and want to upgrade to a home priced at $500,000. Your cost of upgrading is $300,000. If the market drops 10%, your present home drops to $180,000, while you dream future home drops to $450,000, making your cost to upgrade $270,000, saving you a net of $30,000!

2. There are four pieces of advice Money offers readers: Free yourself to act fast, know how strong you are, pick allies carefully (get a great, committed broker and a good mortgage person), and wield your power. Call or e-mail me at cynthia.maloney@bairdwarner.com to discuss this advice in more detail.

3. Money provides a buyer's checklist of criteria that show you have what it takes to take advantage of the opportunities of a "buyer's" market. Be sure:

you have a downpayment of at least 10%;

your housing costs, including mortgage payments, insurance and taxes, will be no greater than 28% of your gross income;

you can afford your home without an interest-only mortgage;

you are planning to stay in your home for at least five years;

you have at least three months' worth of living expenses stashed away in cash. (Never be one paycheck away from a missed mortgage payment.)

REALTOR® Magazine-Daily News-Do You Know What Your Buyers Want?

REALTOR® Magazine-Daily News-Do You Know What Your Buyers Want?