Looking up from the bottom…

Lots of recent reports from various economists and others who track the economy say the same thing – the recession has bottomed out and the economy is starting back. Some of the economists have called the bottom of the recession to have been in April or May of this year, with things heading back up since then. We have now had 3-4 months of positive indicators, including an increase in the number of home sales. We are still on the downward track, as far as home values go, but we may be stuck in a pattern that will overshot the mark in that category, just because it will take time for lenders and appraisers to adjust to the turnaround. We also still have quite an overhang of foreclosed or short sale homes on the market, with no end in site yet.

So what does this mean for buyers and sellers? Well, many buyers, especially first time buyers, have been in a buying frenzy for a couple of months now, trying to make sure that they get in under the end of November deadline for the first time buyer tax credit. Investors are still going strong, too, with many buying up blocks of houses all at once. There seems to be a lot of ad hoc investor groups that have sprung up lately with lots of money to spend on distressed real estate. There has also been an up tick in move-up buyers out in the market, as they realize that they should buy now, before they miss the best prices in decades in the market. The increase in buyer activity, especially at the low end of the market, has resulted in many homes receiving multiple bids.

What about people who want or need to sell? Certainly the general economic turn around is good news and we are likely near the bottom on the value loss that occurred over the last 2-3 years. If they are planning to buy something else after they sell, at least these sellers will get the benefit of the down market on the buy side. If not, they will have to deal with the loss that they may be taking, be it a paper loss or a real one. It is still necessary to price to a market that is being driven by distressed homes. It’s more important than ever to get and heed the advice of a good Realtor about pricing for this market. With inventories declining and more buyers out looking, now is a good time to get on the market. Trying to wait out the bottom and regain some lost value will likely just result in a long delay in getting on with life, without a lot of added reward on the price.
So that’s the view from the bottom, looking up. Now’s the best time in the last 12-18 months to buy or sell and not acting soon will mean that you’ve missed the opportunity.