Things have definitely slowed down since the tax credit expired. However, we're hoping sales will pick up again with the lowering interest rates that caught everyone by surprise.
It was predicted that interest rates would rise to around 6% in 2010. No one was ready for this latest drop, below 5%! Some are now saying we could see rates as low as 4.5% again!
How Low Can We Go?
We now have a great combination for buyers - prices have backtracked to 2003 values and interest rates are below 5%. Some say prices have another 20% to fall, but I'm not a gambling person and with these low interest rates right now, I'm not sure I'd want to wait if I were thinking about buying.
What if prices don't fall another 10% or 20%? What if interest rates start creeping up, especially since no one predicted they'd drop this low again?
Because I'm not a risk taker, I purchased a Scottsdale townhouse in Arizona last year. I didn't want to take the chance that prices would get higher, especially when there was talk of Arizona getting over the "hump" of foreclosures and stabilizing.
I probably could have gotten a better deal had I waited. If I purchased this year I might have gotten a better deal if I waited until next
year. Boy, if I only had that crystal ball!
But my Scottsdale, AZ purchase was for the long-term, for our future retirement, and we love it. The only reason we'd ever consider selling it would be to get something even bigger down the road or to get a single family residence. In fact, I love my townhouse so much I can't imagine ever selling it. I'd almost rather rent it out but that's difficult if we don't live in the area full-time.
This Could Be the Best Selling Climate for Buyers
I've said this many times before during this continued Buyer's Market. This market is great for buyers but terrible for sellers. I'm seeing more and more sellers turning into reluctant landlords - and I might do the same!
I just wish I knew a turn-around time, but there goes the need for that crystal ball again. If we turn into landlords, how long will we have to rent before prices increase again? One year, two, three? What about predictions that we won't see appreciation until 2015, or even as far as 2020?
As a Potential Buyer, the Best Time to Buy is Your Decision
If you're ready for a long-term commitment by making a real estate purchase, with today's low prices and our once again under 5% interest rates, this might just be the best time for you to make that purchase. When we made our Arizona purchase, we went in knowing that prices might continue to drop, but we were ready to buy and interest rates were good. We love our townhouse and have no regrets that we should have waited for even lower prices and/or interest rates.
If you think it's a good time to buy, feel free to fill out my Automatic Home Finder Form that will send you listings from the MLS straight to your e-mail and keep you updated of all new listings to hit the market and price changes. Or call Judy Orr at 708-536-8200.