Let's just say this, at least there is a market.
Prices may be down, less people maybe buying, however even in this down market people are finding a way to close deals.
For a while there, real estate was a sad, down trodden state of affairs. Simply put, prices were too high. Lending was difficult, damn near impossible, and if you were looking to get a jumbo loan, you could forget it.
Now that prices have come crashing down, in some cases fifty percent off their highs, people feel it's safer to buy. Let's face it, if you walk into a department store and see a 50% off sale, don't you feel inclined to buy? Sounds like a great deal to me.
RADIO CHECK. The highest activity in the market is at prices under 300k. This price range is very active, especially with investors and first time home buyers. What's seems to be happening here, is that people are seeing other people buy, and feel that it's now safer to buy. Have you tried buying a foreclosure lately? Get in line.
Also, I'm starting to see more and more deals close above 450k. Not that I'm closing any of them personally, (that would be nice). Our title company, however, has recently had several deals close in this price range.
What's going on, you ask? What I think is, people who have the money to buy nicer and more expensive homes are finally starting to do so. They may not be able to qualify for the $8,000 tax credit, due to their income, but they do have excellent credit and more importantly, the cash to put down a large enough down payment to bring the mortgage down into the conventional range, (under $417,000). Rates in this range have been hovering around 5% for a long time and they won't stay this low forever.
Another important aspect of the "New Market" is, of course, the short sellers, Let's face, most people who bought within in the last five to seven years are now underwater. In order to sell their homes, they have no real alternatives other than to modify their mortgage or bring cash to the table. Unfortunately, most of the short seller's don't have the cash to bring and don't qualify for a modification and hence short sell their properties.
Now, normally when someone sells a house, they turn around and buy another one. Not in the case of the short seller. Short sellers receive no money at closing, and then cannot turn around and buy again. That's a pretty large segment of people who are no longer participating in the re-purchase arena. What they are doing, however, is renting.
RADIO CHECK: I recently read in an article somewhere, which noted that more people renting is not such a bad thing for the economy. Investors buy up the foreclosures at reasonable prices, that provide a good return. Now that the homeowners become renters, they have less monthly expenses. This leaves extra cash in their pocket to spend with, pay down debt or dare I say, save.
To sum it up, investors are buying foreclosures, short sellers are renting from the investors and first time home buyers are enjoying record low rates, and an $8,000 tax credit from Uncle Sam. Let's not forget about the "Financially Healthy" individuals who are able to put down enough money to take advantage of the historical low rates.
The main point is ,that even in this tough real estate climate, one way or the other people are finding ways to buy, sell and rent. To me, that's what real estate is all about, and today that's the "New Market".
Coming up next time on "Real Estate Radio" my year in review.
This is Awesome A! signing off.
Thanks For Reading!
Aaron Glassman, Broker/Owner
A-1 Realty Group, Inc.
954.326.2663 . cell
**Photo taken the first night of Chanukah. Happy holidays to everyone! Have fun and stay safe.
http://www.a1realtygroup.net/
http://www.a1titleandescrow.com/
http://www.lglassmanlaw.com/
Let's just say this, at least there is a market.
