To Buy or Not to Buy - That is the Question
There was a big article in the Seattle Times over the weekend about home prices coming down – or at least that the rate of appreciation is slowing. Of course this is old data. Those of us in the thick of the market are seeing the hundreds upon hundreds of price reductions every day. We know full well that prices have been sliding for some time. I think the consumer knows this too. The big question for most people considering a purchase is; how low is it going to go?
My answer? Not low enough to matter.
In other words, we are currently experiencing a temporary softening in the market due to the sub-prime mortgage meltdown and the resulting lack of homebuyers in the market. According to the NWMLS we have about 9 – 10 months of inventory currently on the market. Sellers will continue to add incentives, lower prices and take homes off the market in response to current conditions. Most people who don’t have to sell now will wait. Thus we will have less new inventory. Those who must sell will get more desperate and the incentives and concessions they offer will become more aggressive. So we will start moving through this inventory a little faster – which means it won’t take 9 – 10 months for the market to recover. I think the market will start to pick up during the early part of next year, February of `08, as it always does.
Our local economy is very robust and ad sales, often seen as an early indicator of the health of the broader economy, remain very strong according to an article in September 28th version of the Puget Sound Business Journal. With our economy rooted in technology, aerospace and international trade, the Pacific Northwest is on an entirely different economic wavelength than the rest of the country. So to me all of this indicates that the drop in housing prices is going to be temporary and the dip in pricing trend somewhat shallow.
What does this mean for buyers? If you want to find a great buy on a home – NOW is the time to act! Think about it for a second – if you wait until the market recovers then you’re going to be thrown back in the market with everyone else – competing for the good properties. Right now there is no competition from buyers – and no one is offering full price! So if you’re at all thinking about buying, roll up your sleeves sharpen your pencil and lowball! You will be surprised at how receptive the seller’s are.
-Mike Satterlee
My answer? Not low enough to matter.
In other words, we are currently experiencing a temporary softening in the market due to the sub-prime mortgage meltdown and the resulting lack of homebuyers in the market. According to the NWMLS we have about 9 – 10 months of inventory currently on the market. Sellers will continue to add incentives, lower prices and take homes off the market in response to current conditions. Most people who don’t have to sell now will wait. Thus we will have less new inventory. Those who must sell will get more desperate and the incentives and concessions they offer will become more aggressive. So we will start moving through this inventory a little faster – which means it won’t take 9 – 10 months for the market to recover. I think the market will start to pick up during the early part of next year, February of `08, as it always does.
Our local economy is very robust and ad sales, often seen as an early indicator of the health of the broader economy, remain very strong according to an article in September 28th version of the Puget Sound Business Journal. With our economy rooted in technology, aerospace and international trade, the Pacific Northwest is on an entirely different economic wavelength than the rest of the country. So to me all of this indicates that the drop in housing prices is going to be temporary and the dip in pricing trend somewhat shallow.
What does this mean for buyers? If you want to find a great buy on a home – NOW is the time to act! Think about it for a second – if you wait until the market recovers then you’re going to be thrown back in the market with everyone else – competing for the good properties. Right now there is no competition from buyers – and no one is offering full price! So if you’re at all thinking about buying, roll up your sleeves sharpen your pencil and lowball! You will be surprised at how receptive the seller’s are.
-Mike Satterlee
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