Where will the market be in 2008?
In 2007 we have witnessed major pricing adjustments as the market continued to correct itself from the over inflated pricing and buying in 2005. The correction started early in 2006 but really didn’t take hold until 2007 as many sellers in 2006 continued to demand prices equal to, or higher than, the 2005 prices.
Buyers still reluctant to purchase during a downtrend held fast but sellers refusing to ‘give” their properties away stayed firm at what they felt were reasonable prices. Thus a stale mate for most of 2007. Seller’s who had continued to demand higher prices for their properties finally realized that they either had to reduce their prices below the 2005 market prices or take their properties off the market. Eventually many sellers choose to reduce their prices until their properties were sold while others choose to take their properties off of the market. Both of these actions helped to reduce the inventory thereby causing prices and the market to finally stabilize.
Add to this an increase of buyers looking for that perfect property at a reasonable price, interest rates close to a forty year low, and you get an entirely different market for 2008. A “Stable Market”. What this means is that buyers will continue to have a nice selection of inventory available to them, reasonably priced, with close to history low interest rates that may not be around much longer. And sellers will finally be able to sell their properties, if they are priced reasonably and in decent condition.
Smart buyers should recognize that this market is changing and with the New Year just around the corner the fence sitting is over. The buyers who choose to wait much longer may be saying, in years to come, what all of us heard in 2005 “I should have purchased this property when I had the chance two years ago”! There is no more need to wait for prices to drop below already marked-down prices nor to low ball an offer on an already reduced property. Therefore a reasonably price property combined with low cost interest rates could be a potentially great deal.
Sellers, on the other hand, should not take this as a turn in an upswing in market pricing. It is not. Seller’s attempting to price their properties for what they might have commanded in 2005 or even much higher than what comparative properties sold for in 2006 and 2007 will be pricing their properties out of the market and come up empty handed.
In 2008 – A Stable Market. Sellers Sell … Buyers Buy Prices Stabilize. A Win Win for all.
November 29, 2007 at 3:23 am
It seems that 2008 should prove to be a better year for both buyers and sellers, but there’s one key element for each.
Buyers will have to stop listening to the news that scares them away–prices are lower–and banks will fund them, especially if they are state employees, or folks like teachers, firefighters, police officers, hospital workers –there’s money for you to borrow–just ask.
Sellers –forget what your neighbor got for their house in 2005. That year was a “fluke” and not a reasonable representation of what anyone can expect for today’s market.
All in all, look at history. Yes, it repeats itself, but one thing remains–you’ll always make money owning real estate near mother ocean. Don’t hesitate to buy right now, and if you’re selling, sell for what it’s worth in this market, not 2005.
Sue