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Making the Most of a Changing Real Estate Market

For many home purchasers, the current Real Estate situation is their first introduction to a soft sales market. If you had been looking to buy a home at virtually any time between 2001and 2006, almost anywhere in North America, the market you found was a vibrant one--prices rising strongly and quickly, houses selling in a matter of hours or days, bidding wars erupting for even marginal properties. Best described as "that was then and this is now," what a difference a year makes!

In virtually every area of North America the market has either stagnated or dipped appreciably, both in the level of activity as well as pricing. It is by no means unusual to see decreases of 10% in closed sales, or, in some cases, considerably more. Prices are generally slipping, more in some areas than in others. As depressing as this situation is for home sellers and home owners considering selling their houses, for home buyers this is likely a big boost to their buying process. Clearly,we are in the midst of a buyer's market for the first time in a number of years.

A buyer's market in Real Estate is defined as one where there are more sellers (and thus more houses) than there are buyers for them. In contrast, what we saw earlier in this decade was, in many areas, a raging seller's market where there were many more home buyers for properties than there were houses available for sale. As of the beginning of the 4th quarter of 2007, the tide has definitely changed.

The advantages to a buyer in this market are numerous. A few important plusses include:

+ There are many properties from which to choose
+ Properties are often in better condition
+ Pricing is much more "buyer friendly"
+ More time is generally available to make a decision

More properties to choose

Inventories of both new and resale homes are at historical highs. Where a year or so ago a buyer may have had a handful of homes (or less) to consider, there now may be dozens available from which to choose. The increase in choices works in the buyer's best interest in a couple of ways. First, it obviously means that it is less likely that a buyer will need to "settle" for a house that does not truly fit their needs and wants. In addition, because of such a competitive market, sellers may be more inclined to negotiate on pricing, added "amenities" and/or closing costs at settlement.

Properties are often in better condition

The more a house stands out in comparison to those it is in competition with, the more likely it will be seen and eventually purchased. Houses that are in disrepair will likely be quickly dismissed by potential purchasers.

Pricing is much more "buyer friendly"

Again, due to competition and supply and demand, the property that is priced correctly will have a distinct advantage in this maket over those that are priced considerably over true market value. It is crucial, therefore, that a buyer has their Agent develop a CURRENT
Comparative Market Analysis (CMA) to determine what houses are selling for TODAY and not what they sold for six months or a year ago. The difference may be striking.

More time available to make a decision

Unlike earlier this decade, when many buyers were pushed into decision because of a distinct shortage of inventory, the sheer number of houses available today means that the pressure to buy, although not eliminated, is much less intense. This means, most importantly, that the chances of making the wrong decsion are less if a buyer uses the time available wisely.

How to make the most of the current market

Spend the time necessary to find the home that best suits your wants and needs:
Find a Home

Get a clear picture of today's current pricing trends:
Home values

Have any potential home thoroughly inspected:
Home inspections

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