IS IT TIME TO SELL?? IS IT TIME TO BUY??

So what does this mean to YOU!?

If you’re a seller, the news really isn’t all that good.  Bottom line, after dealing with a number of sellers, both as the listing realtor and as a buyers’ agent, the one thing that stands out, pretty much without exception, is that their properties weren’t worth as much as they thought, sometimes by a wide margin, and yours is probably no exception.  Look at the graph; look at recent comps.  Please.  Right now, the biggest impediment to home sales has proven to be sellers’ refusal to accept the fact that the bubble has burst, the tide’s gone out, and it’s carried a lot of their equity out with it.  Sadly, a lot of that is due to some of my fellow realtors who get listings by promising unrealistic sales prices to their clients (usually based on 2-year-old comps), and these poor folks end up getting bypassed by bargain-hunting buyers, or squeezed between low-ball offers and a realtor who doesn’t want to spend any more money on futile marketing.  I know that’s harsh (MY home isn’t worth anywhere near what it used to be either), but facts are facts, and buyers really don’t care how much money you walk away from the sale with.  With more foreclosures looming, no one seriously expects the market to turn upward in the short term [ Home Price Forecast ], and even when it does, no one expects to see a return to bubble-level valuations.  As things stand, you have three options.  If you have a masochistic streak, you can keep it on the market at a price that doesn’t reflect the realities of the current market.  If you can’t bring yourself to sell your property at today’s prices, take it off the market, but know that it’ll probably be some time before you get your price (and you need to figure out what that will cost you).  Or you can price your home aggressively, and if it’s properly staged and marketed (something I’d love to help you with), chances are you’ll get a sale.  And remember this:  If you’re selling in order to buy elsewhere, you may take a hit when you sell, but by buying in a down market with bargain-basement mortgage rates, you’ll most likely come out way ahead in the long run.

If you’re a buyer (or a potential buyer), you need to be looking at properties and lining up financing, whether you’re ready to pull the trigger or not.  Mortgages rates are unbelievably low and there are some terrific deals coming on the market all the time, but you need to be out there now so you’re up to speed, and able to recognize that really incredible opportunity when you see it [ Affordable Homes ].  My clients are always armed with the most comprehensive, up-to-date information available pertaining to the Whidbey Island housing and property market, but there’s no substitute for getting out and actually looking at homes and land.  Let me show you around; I enjoy it, and it helps keep me on top of what’s happening in what is obviously a very dynamic market.

Here are a couple of other things to think about.  How much house you can afford depends almost as much on mortgage interest rates as it does on the purchase price. A 1% increase in rates adds about 19% to the cost of a home.  For example, at 4% interest, you can borrow $200,000 and end up with a P&I of about $955 on a 30-year fixed mortgage.  But if rates go up to 6%, and that's all the monthly payment your budget allows, you'd only be able to borrow $159,000.  To put it another way, that 2% difference on a $200,000 loan means that after 10 years in the house, you'd have paid over $39,000 more in finance charges and have around $10,000 less in paid-off principal.  Could rates go up that much?  They’re not forecast to in the short term, but I’ve included this chart for a little historical perspective. And no matter what Dr. Bernanke says, you know that he’ll raise the discount rate at first hint of inflation, and the banks will follow.