I want to switch gears right now and deal with a few other topics that may answer some of the other questions you have on the market and on housing in general.
How much lower will the values go here in the Valley?
As I said previously, we are seeing houses valued at about what they were worth in 2004. It appears that things have stabilized a bit for now, but no one can be sure. I think that it is important to remember that like most investments, real estate is best an investment when it is for the long haul.
Over the last 8 years, there has been a lot of “flipping” going on the market. In fact, there has been so much of it that there have been TV shows featuring the real life drama of it! However, now that the market is not skyrocketing literally by the year, the time for that is probably done. It is now time to go back to the “old-fashioned” way of buying a house that needs some stuff done to make it your own without the thought that in 6 months you will turn it for a huge profit. It is time to view your purchase again as your HOME. Not a house you will flip. When you do this, and you live there for a while making wise choices in improvements, in time it should be a great way to build equity and see an increase in your investment.
Again, these are just my opinions...
Next time we will discuss the best improvements to make in your home.
Thursday, July 23, 2009
Thursday, July 16, 2009
The State of our Market... Part Four
Now, what about these foreclosures that we keep hearing about? It is everywhere, isn’t it?! We hear about it all over on the news, and it seems that we should all be able to get a great deal if we can just sniff out that one fabulous foreclosure.
Let me give you a few facts about foreclosures.
1. While there may be lots in other areas, we don’t have that many here. In talking with the owner of one of our local title companies, he said that of all the homes that were closed by them last year (and there were hundreds), only 5 turned out to be that true foreclosure. There are just not that many of them.
2. Foreclosures, unless they are the RARE ones that go to the courthouse steps where you bid and pay CASH (no loans are accepted!) at that exact moment to get a house, are priced at FAIR MARKET VALUE. They are listed just like every home on the MLS. The banks are not giving them away. In general, you are going to pay the same amount for a house owned by the bank or owned by a person for the same price. The word “foreclosure” is NOT a code word for bargain.
3. The purchasing process can be filled with twists and turns, and the banks are the ones who WILL win. We just had an offer on a house that was accepted. The next day, even though we had a legally binding contract on the house, the bank took a different offer and our buyers were left in the cold with no recourse. The banks always get their way, and it is a frustrating process for the buyers.
4. It is the same deal with short sales. A short sale is when a home is offered for and sold for less than what the bank is owed. We are seeing these in the Valley, and again they are tempting. However, the banks continue to be in control and are certainly not interested in you or the seller. They just want the most money.
I know that it is tempting to hear all about foreclosures and that friend of a friend who got that great deal … but I am telling you that most of that is simply not true. It really is wise to find a good agent to help you find the right house at the right price for you, whether it be an owner-owned, short sale or foreclosure. Look for the right house, not the title on it.
Let me give you a few facts about foreclosures.
1. While there may be lots in other areas, we don’t have that many here. In talking with the owner of one of our local title companies, he said that of all the homes that were closed by them last year (and there were hundreds), only 5 turned out to be that true foreclosure. There are just not that many of them.
2. Foreclosures, unless they are the RARE ones that go to the courthouse steps where you bid and pay CASH (no loans are accepted!) at that exact moment to get a house, are priced at FAIR MARKET VALUE. They are listed just like every home on the MLS. The banks are not giving them away. In general, you are going to pay the same amount for a house owned by the bank or owned by a person for the same price. The word “foreclosure” is NOT a code word for bargain.
3. The purchasing process can be filled with twists and turns, and the banks are the ones who WILL win. We just had an offer on a house that was accepted. The next day, even though we had a legally binding contract on the house, the bank took a different offer and our buyers were left in the cold with no recourse. The banks always get their way, and it is a frustrating process for the buyers.
4. It is the same deal with short sales. A short sale is when a home is offered for and sold for less than what the bank is owed. We are seeing these in the Valley, and again they are tempting. However, the banks continue to be in control and are certainly not interested in you or the seller. They just want the most money.
I know that it is tempting to hear all about foreclosures and that friend of a friend who got that great deal … but I am telling you that most of that is simply not true. It really is wise to find a good agent to help you find the right house at the right price for you, whether it be an owner-owned, short sale or foreclosure. Look for the right house, not the title on it.
Thursday, July 9, 2009
What is the state of our market? Part Three...
Previously, we talked about what to expect if you are a buyer in our current market.
But what if you are a seller? Should you be feeling hopeless? No, but let me give you some helpful information as well.
If you do not need to sell, don’t sell. It is true that values have dropped. So you will not get as much for your house as you would have a few years ago. Now, I cannot look into the future, but we are hopeful that prices will go back up at some point, and in looking at trends we have no reason to assume otherwise. So if you are happy with your house, then sit still.
If you are in over your head, meaning that you bought when the market was at the top and/or you have refinanced in the last few years and pulled money out, you should sit still as well. I would highly recommend waiting for prices to go back up and not be tempted to pull out any more money from your home value unless it is for an improvement that will be a real winner. (We will talk about those later.)
Now, if you have owned your home for more than 5 years, you probably have some equity. Listen up! This may be a great time for YOU to sell. Why? Because the house that you have dreamed of that may have previously been out of reach may be attainable now. Remember how I said values and interest rates have come down making it the buyers “perfect storm”? Well, you could be one of those buyers. Now I know some of you are saying, ‘But I am not going to give my house away or take a loss on it. I paid $200,000 for it and I am not going to sell it at $180,000!” That is fine. But I would encourage you to think this through. If you sell for a “loss of 20,000” but are able to get the house you had your eye on that was once $300,000 that is now $240,000…. Maybe it is worth it to take your $20,000 loss to save $60,000! You have stepped into what is likely going to be a great investment while buying at the market low and getting a great interest rate to boot. Just food for thought!
Next time we will look at the truth about foreclosures. Stay tuned@
But what if you are a seller? Should you be feeling hopeless? No, but let me give you some helpful information as well.
If you do not need to sell, don’t sell. It is true that values have dropped. So you will not get as much for your house as you would have a few years ago. Now, I cannot look into the future, but we are hopeful that prices will go back up at some point, and in looking at trends we have no reason to assume otherwise. So if you are happy with your house, then sit still.
If you are in over your head, meaning that you bought when the market was at the top and/or you have refinanced in the last few years and pulled money out, you should sit still as well. I would highly recommend waiting for prices to go back up and not be tempted to pull out any more money from your home value unless it is for an improvement that will be a real winner. (We will talk about those later.)
Now, if you have owned your home for more than 5 years, you probably have some equity. Listen up! This may be a great time for YOU to sell. Why? Because the house that you have dreamed of that may have previously been out of reach may be attainable now. Remember how I said values and interest rates have come down making it the buyers “perfect storm”? Well, you could be one of those buyers. Now I know some of you are saying, ‘But I am not going to give my house away or take a loss on it. I paid $200,000 for it and I am not going to sell it at $180,000!” That is fine. But I would encourage you to think this through. If you sell for a “loss of 20,000” but are able to get the house you had your eye on that was once $300,000 that is now $240,000…. Maybe it is worth it to take your $20,000 loss to save $60,000! You have stepped into what is likely going to be a great investment while buying at the market low and getting a great interest rate to boot. Just food for thought!
Next time we will look at the truth about foreclosures. Stay tuned@
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