According to many experts in the housing
industry, there may be a long road to recovery as far as the housing
market goes. Defaults on mortgages and the number of homes repossessed
because of foreclosures are expected to increase 42 percent this year.
We are not even halfway through the Hundreds of Billions of dollars
worth of risky mortgages that are set to go through adjustments that
will impact the borrowers. But keep in mind this group of people in
trouble were in a group of high risk borrowers and most should have
never been given these loans in the first place. In reality, besides
a well needed correction, the housing industry is still strong.
The federal government is trying to ease the pain of these risky loans,
by developing a plan called HOPE NOW which could bring aid to 1.2 million
homeowners. The HOPE NOW plan is designed to help subprime borrowers
who can at least afford the current, starter rate on a subprime loan,
but will not be able to make the higher payments once the interest rate
goes up. Hope Now has a toll free hotline 1-888-995-HOPE, which is available
24-hours a day to provide mortgage counseling in multiple languages.
So what does all this mean if you have been waiting to sell your home
in this less than perfect market? Believe it or not there is still hope.
The National Association Of Realtors report that in the 3rd quarter of
2007, home prices were stable, while others markets actually saw a slight
gain. In fact, despite a slow down in December, 2007 ended as the fifth
highest in sales on record!
But before getting too carried away with the idea that now is the right time
to sell, step back and appraise the overall strength of the current
home market in your area. Lawrence Yun, NAR chief economist, said the
market is experiencing uncharacteristic weakness. “Home sales remain
weak despite improved affordability conditions in many parts of the country,
but we could get a quick boost to the market if loan limits are raised
in combination with the bold cut in the Fed funds rate,” he said. “Home
prices are lower, mortgage interest rates continue to decline and incomes
are higher, but many potential buyers are delaying a purchase.”
With that in mind you should evaluate how many similar houses are on
the market in your area. How long have they been on the market? What
offers if any have been made? If some have sold and others have not,
what made the listing that sold a commodity?
Even if housing prices fall further, potential buyers shouldn’t
try to time the market bottom. Even if you could figure out the best
time to buy, right when prices have bottomed out and begin to rise,
by the time you find the house you want, set up the financing
and close
the deal the best time to buy may have already passed.
A better bet is to go ahead and look for the house and location
you like and would be happy with for the next few years.
Negotiate if you must,
just don’t get too carried away. If you overplay the haggling game,
you could very well end up losing that perfect house for the sake of
a few thousand bucks. I’ve seen good deals fall through time and
time again haggling over that last little detail. Don’t do it!
In the long run it’s not worth losing that perfect home for less
than what it’d cost to furnish the place.
written by Gary Ward, Real Estate Broker, Exit Realty Mountian
Properties Feb 6,2008
