The Real Story…
News and commentary about the real estate market and related topics.
Dave Parrish, ABR ®, CRSA, CSP, GRI, ePRO ®, REALTOR ®, RealtySouth
The opinions expressed here are my own and don’t necessarily represent those of HomeServices South.
Are we there yet?
It’s vacation time and many of us find ourselves traveling with children… from the backseat you can be sure you will hear the question: Are we there yet? Little voices of anticipation and yes perhaps anxiety wondering: Are we at the final destination… How much longer will it be?
Well I’m guessing you know where I am headed from here: Are we there yet? Has the housing market hit bottom, yet?
I know that like my granddaughters, the long qualified and detailed answers aren’t what most folks are looking for…The girls want to know if we’re about to go swimming in the ocean not that we are another 60 miles from Seagrove, that we’ll need to unpack the car, go buy groceries, get a bit to eat and perhaps take a nap, not to mention the inspection of the beach and water for tar balls before we decide if it’s alright to get wet! I also know better than saying: Just a few minutes girls; lest I be reminded more than once: But Poppy you said!
So here’s Poppy’s answer to that question…And are you going to hate this… My answer starts with a question… Actually a list of questions: Are you buying or are you 
selling? What do you want to accomplish… What are you hoping so see when we get there? That is: What are your motivations for buying or selling? Do you have specific timelines or deadlines (pressures that will impact your decisions)? Where is the home that you want to sell? What are you looking for in a home? What location(s) are best for you and your family… and why those locations? And the list goes on… You see the answer to the question: “Are we there yet?” is as unique as the individual asking the question.
Now I know that most of you will find little satisfaction for your curiosity or anxiety with this answer; so, I will offer the opening bit of information and advice I offer to my clients.
For Prospective Sellers… My opening statement in a listing appointment is: This may not be the right time for you to sell… We can only make that decision when we evaluate your circumstance as a whole. Why do you want to sell now? What is the condition of your micro market… Is it a declining or advancing market? What are the prospects for recovery of this market … Short-term, mid-term, and long-term (with facts that back that assessment)? What buyers in this neighborhood are getting in terms of concessions? What can you realistically expect to net from a sale in today’s market? Pros and cons of selling today versus waiting… Are you up to competing in a Buyer’s Market?
For Prospective Buyers… the concerns are a bit different, yet we begin with a similar list of questions: Why do you want to buy now? Are you able to buy now? Realize that unless you’re making a cash 
purchase (buying without a mortgage) or have a well-heeled friend or family member providing the funds for free or below the historically low market rates, the cost of a home is in more than the purchase price. What we are looking at is Home Affordability, which in addition to price is impacted by mortgage rates, mortgage insurance (PMI/MIP) rates, seller concessions and federal (RESPA) laws and regulations governing the sale of real estate, just to name a few factors.
While the present environment seems like it couldn’t be better for the prospective home buyer… you still need to consider market conditions in your desired location, and perhaps the effects of doing some work to improve credit scores, lower Debt-to-Income ratios, or perhaps saving the money for a down payment… You see it’s really all about the net of all these conditions that determines if now is the right time for you to buy,
Will prices decline further? Perhaps… depends on the price range and location and your desires. Are you locked in on new construction, or are you interested in looking in a previously owned home… how about a real fixer-upper? Will the historically low mortgage rates drop further… Hard to see how they could. Will down-payment requirements increase… looks like a possibility! Will mortgage insurance rates go up again… maybe… the doorway to do so has been opened.
Anyone who tells you point blank the market is this or that without getting into the specifics is simply giving half truths… at best!
A final word for buyers: I am reminded of a conversation I heard at a local Circuit City twenty-five years ago… The customer who was looking at buying a PC asked the sales clerk; “Well prices are dropping, why should I buy one now… it will be cheaper next year?” I smiled a bit inside as I heard the clerk’s response… “”you’re probably right… but think of the opportunity you will have missed to have the use of a computer while you’re waiting for the prices to quit falling” I’ve often wondered if that person ever bought a PC? I know one thing for sure: We will never know where the bottom of the market is until the bottom has passed us by. But is that really why anyone buys a home?
So we’re off to the beach… the girls are asking: Are we there yet? Poppy responds: “No…Not yet… but just imagine how much fun we will have when we get there! Tell me: What do you want to do first?”
May the market be with you!
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