Buying real estate-Now is a good time to buy

I came up with a saying many years ago that best describes buyers and what they tend to do wrong. “Buyers buy when all the other buyers are buying which is the worst time to buy”. Yep, it’s a brain twisting saying but happens to be very accurate.

Buyers need to feel like they have made the right decision. Their purchase is justified when properties around them are getting bought. It justifies the decision of the financier too. Banks and mortgage companies require “comparables” before they authorize a loan. A comparable is a home similar in size and style that has been recently purchased and is located near-by. The more comparables sold in the in the area the better! Well, the better for the loan approval and the seller. Unfortunately, as sales increase, inventory will decrease and price goes up.

Let’s get back to the question, is now a good time to buy real estate? As of February 1, 2009, the Crystal Coast had built up a 33 month supply of inventory. At no other time have we had so much to choose from. To put this into perspective a normal stable market is said to have only a 6 month supply. In 2005 when everyone was buying there was just a 5 month supply of inventory. So right now you as the buyer have the greatest selection of all times along the Crystal Coast.

A big supply of inventory usually means a lot of properties have been for sale for a long time. Frequent sales drives up price but the lack of sales drives price down. Sellers lower prices to counter the extended days their property have been on market. They also tend to negotiate down towards the buyers demands.

Does a glut of inventory and days on market really affect price? Well, All I can only tell you is what has happened. This past January the average sold price for a residential property along the Crystal Coast averaged $189,000. In 2005 the sold average price was $323,000. (Prices rounded up to the nearest $1,000). So which do you think was a better time to buy? In 2005 with a small inventory and high price or right now with historically high inventory and low prices?

And while I’m talking about historically low numbers I can’t over-look 30 year fixed mortgage rates. Already this year North Carolina lenders have offered rates as low as 4.25%. The national average has been consistently under 6%.

Hamlet asked, “To be, or not to be”.

I asked, “To buy or not to buy.

I’ll let you determine if you want to, “suffer the slings and arrows of outrageous fortune“.

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To buy or not to buy, that is the question!

By: Bill Hitchcock

February 27/09

Is now a good time to buy real estate? That is the most common question and hotly debated subject of the day. Only 3% of all homes listed this past January Along the Crystal Coast actually sold. Average sales for that month are around 15%. During 2005, the biggest sales year ever here had January sales at 20%.

So with sales so poor, does that mean it’s the wrong time to purchase real estate?