So what are the buyers waiting for? Prices are low. Interest rates are low. Well, the media has once again discouraged buyers from buying with the negative reports of foreclosure. There are almost 3 million foreclosure homes on the market in the US…. and more to come. Florida has the 2nd highest record of foreclosure trailing California. Bleak, yes!
Here another way to look from a more positive perspective. Interest rates are at a historic all-time low! Average ARM loans are quoting as low as 3.54%, and a 30-year fixed at 4.53%. Hmmm, what does that mean to a buyer – a lower payment, yes. In a year or two, if the average market price declines another 10%, your payment will be the same if the interest rate goes up just 1%! Rates rise as sales improve; that is a historic fact. RIGHT NOW, you can buy a home at a fantastic price and at the lowest rates in history. There is really no reason to be sitting on the fence.
Sales are up for 2010 from previous years so far year-to- date. The main reason, I believe, is the prices are finally decreasing. Sellers have had time to see the facts and if they want to move, they will have to get IN the market. What I mean by that is they have to price their home within the grid of homes that SOLD in the past 3-6 months.
For the past 4 years, many homeowners have held onto their mindset of 2005 pricing. Most sellers were following the market down. If sales were at an average of $200,000, they would price their home at $225,000 rather than a salable price of $195,000. As the market prices decreased, so did these homeowners, but again on the top of the market instead of in. This is the prime reason that homes are sitting on the market and not selling. Historically, the market increases at 4% over the past hundred or so years. So what we have experienced is a bubble and a reflected valley. We will recover in time and the prices will get back on track.
Jeanine and Howard Metts
Metts Group at Future Home Realty
2653 McCormick Drive, Clearwater, FL 33759
Phone: 727-418-5224 or 727-631-4191