Advice for 2009

The last several years have presented several challenges as well as opportunities in the real estate market. We have seen prices move up and down and inventories rise. Sellers continue to be challenged by “the new” value of their property and buyers have more choices than ever before and the constant fear of not buying at the bottom.

As we look towards 2009, There are a few bright spots.

1. Interest rates are at historical lows. What does that mean? You can buy more of a home today than 2 years ago. Example: A 30 year loan on a $225,000 home with a 4.5% interest rate would have a house payment equal to a $200,000 home with a 6.5% interest rate.
2. There are signs that the real estate market across the country is getting better. Wilmington and the surrounding areas are dependent on people moving into our area. Our market has struggled over the last two years because prospective buyers can’t sell their houses where they are. In the northwest market and western states, there are signs that market inventory has reduced and their markets are starting to come back.

If you are a seller or a buyer in 2009, I would encourage each of you to do the following:

Sellers:  

1. Price your house on facts and not emotions. Your house is worth what a buyer will pay. The price of your house not only needs to attract a buyer but also an appraiser. They will both look at recent solds to determine the value of your house and is worth. Eliminate the wiggle room. Even in today’s market buyers will pay the asking price if it is priced correctly.
2. Have a pre-inspection conducted on your property before you list it. Remember, once you get an offer there are only two reasons it won’t close - the inspection report and the financing. I would eliminate one of those outs by having your house pre-inspected.
3. Be prepared to show your property 24 hours a day. You are either selling or testing the waters. There are too many options for a buyer to look at in this market. A buyer will usually not reschedule to see your house.

Buyers:

1. Hurry up! Interest rates are unbelievable. While nobody can predict the rise or fall of rates, they seem to have a lot more room to go up than to go down.
2. Don’t try to time the low of the market. Unfortunately nobody told us when things reached their height and nobody is going to tell us when they reach the bottom. Our market is like a candy store, lots of choices. When the market starts to improve the candy store will not have the same choices.Remember, we used to buy houses to be the place we raise our family. We met neighbors that would become friends for life. Our children would mark their height on the door. We could always count on our homes being a solid investment over the long haul.

I would much rather miss the market low by 5 or 10% and get everything I wanted than settled for a house that doesn’t meet all of my criteria.

It’s like buying a car at the end of the year, you get a huge discount but it’s a purple car with crank windows and vinyl seats. I would rather have gotten everything I wanted in the same model. Don’t take your biggest single investment lightly – let us know how we can help.

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