Long Beach Housing Market

Timing the market
February 2nd, 2009 5:43 PM
Sometimes I feel like I'm lecturing instead of just sharing my thoughts, but I keep hearing the same question over and over - Do you think that prices will drop further?  And the follow up - Do you think they'll ever go back up?  As an example I spoke with a Seller today who has been procrastinating about selling for over a year.  They bought their condo in the early 90's and now they owe next to nothing on it.  Even in this down market, they'll make a profit.  Oh sure not as much as they would have just a year ago, but enough to afford to pay cash for the home they have their eye on out of town.  As the market continues to shift, buyers need to remember something about sellers.  Once the market shows signs of improvement, the really good deals will begin to slip away.  Sellers won't be interested in making the kind of concessions they are today.  So as buyers sit on the fence and wait to be sure they are at the bottom before moving forward, the pent up demand will show up and buyers may be faced with lots of competition for the best homes available.  The biggest hazard with trying to time the market is that while interest rates are very low, what most people don't realize is that the impact interest rates can have on the real monthly costs of home ownership.  Even a 10% drop in home prices is immediately nullified by a 1 percent increase in interest rates on a 30 year fixed loan.

Posted in:General
Posted by Heather Burke & Sarah Ireland on February 2nd, 2009 5:43 PMPost a Comment

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