Thursday, March 20, 2008

With All The News About The Stock Market, Interest Rates, Economy … How Is Our Market?

It is important to separate our market from the constant bombardment of financial news you receive. We think our many special local attributes necessitate doing so. It is still a Buyer’s market in Carson Valley, but there has been a good increase in buying activity of late … inquiries, showings… even offers. Many Sellers have reduced their prices, and are willing to entertain an offer while others have taken their homes off the market and are waiting. In other words, our market seems to be stabilizing and finding its bottom … at least we hope we can see it from here.

Many Buyers are playing the waiting game thinking the market will drop. It might … likely will a bit… but is that smart today? We think not and here are some ideas why. These are our ideas and based on experience and instinct only. Let’s look at the stock market. It’s been a financial roller coaster of late. When it was rising rapidly in the late 1990’s people took their money out of real estate and invested in the market. They made a lot of money until the scare of 2000. When they could, they pulled their money and invested again in real estate. We saw the run up and the eventual profit-taking, much of which went in to the stock market causing it to again rise to great heights.

With the recent stock market decline we anticipate private investors getting their money out when they can and coming back to the King of investments… real estate. Loans were difficult to get a few months ago, but the lending industry is stabilizing and there are many opportunities for Buyers to secure good financing to buy a home. With oil prices at all time highs one can only guess what the cost increases will be in building a home. From high delivery costs to the cost of roofing material, pipe, and carpet, the costs will increase dramatically. We anticipate that all of this will cause resale home prices to rise accordingly.

The inventory of homes for sale in most of our market segments is now more of a one or two year supply vs. the ten year supply we were seeing a few months ago. We anticipate that as sales pick up there will be a rapid rebound, prices will increase rapidly. It is doubtful that they will go to 2005 heights right away, but if they go up just 10% that is $30,000 on a $300,000 house. Are you trying to save an extra $15,000 (5%) now? That is a $45,000 swing. Where do you think the market is going? How much are you really betting on the outcome? By not acting it might be more than you think.

Our Advice: Interest rates are low. Prices are low. Cherry pick the market now and act. Pick the best property that fits your wants and needs and make an offer. You might be pleasantly surprised. You will be happy in the long run, and this isn’t a short term investment. Live your dream, don’t continue waiting, wondering if you are going to be able to make a great buy. The “scream’n deal” is out there now. If you are looking for the “deal of a lifetime” … you might lose in the long run by waiting. Waiting for a “spring bump” or an influx of out of state Buyers to sell? Don’t.

You can’t sleep in a stock certificate. Don’t deny yourself the pleasure of owning what you really want, enjoying the tax benefits of real estate ownership, and putting to rest the anxious moments of trying to second guess the market. Be smart … act now. Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, , Email Us or call 775-781-5472.

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