A Changing Market

It has obviously been a different market than most of you are used to as many of you are relatively new to the business. The market reminds me of our weather the last few days - when it rains, it pours. We are seeing inventories skyrocket, rates raise to their highest level in 4 years and both appear to be heading higher. In addition, the Fed is indicating they will be raising short term rates for the 18th consecutive time as they try to hedge against inflation.

So what do you do if you're trying to sell right now? Don't try a high price to "see what happens" and reduce after 2 - 3 weeks. That strategy does not work. Also, your house needs to be in pristine condition. Don't wait to "see" what people say about the colors, carpet condition, etc. Get the work done before it goes on the market. We are seeing houses sit on the market with this kind of approach - don't let it happen to you. A few other things to do is to have a home inspection and appraisal done prior to puttting the house on the market. Make the repairs, and have report and repair receipts available for potential buyers to review. In addition, have the appraisal available as well. Look at how model homes look. Builders do punchout lists monthly, if not more often, on their model homes to keep them in top notch condition. Builders are also constantly adjusting to the market pricewise as well. Your may need to do the same.

What about buying? Rates are going up and as a result so will your payments. Don't be discouraged to make an offer on the house that meets their needs. Don't wait to see if the seller will reduce it, or wait and see if another one will come on the market. You can't time the bottom of the market. As a comparison, you can't do it with stocks or rates either. The house price may drop, it may not, but history tells us it will go up. Over time it will prove to be an excellent investment. More than likely, you won't be flipping it, you will be there for several years so do not to think about it on those terms. It is a home. A place to make your own, perhaps raise a family, meet new people, get closer to work or whatever your situation dictates. It will be a solid investment.

Local Market Watch

According to the Local MLS site’s
Quarterly Economic Market Watch...
As for the local area, the job market has been very positive in recent quarters (2.6% growth in the latest quarter). At the same time, higher mortgage rates have reduced affordability. Home sales, as a result, has being pulling in different directions. Sales were 9% lower in the first quarter compared to the year before. Home prices have continued to increase though because few are forced to sale in a job
creating environment.
Given the strength in the national economy, the
local economy looks to catch part of that upward tide by the year end. Home sales are expected to definitively turn positive once interest rates
stabilized while jobs get added. The forecast is for 8% decline in home sales in 2006 followed by a 2% rise in 2007. Home prices will increase 5% in 2006 and then another 5% in 2007.