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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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