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Buy Now! Sell Now!

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By : Fran Lichtman Randy Rabney    99 or more times read
Why is it a wise decision to sell now or buy now?

We recently attended a conference presented by Jeffrey Otteau, a well known expert on the NJ housing market. Below is an overview of what we learned in combination with what we know being experts in our marketplace.

With hindsight, we realize that the economy began it's contraction during the fourth quarter of 2007. This was the point in time when home sales really began to slow down and prices began to fall at a faster pace. Several things brought us to this point. From 2000-2005, NJ income rose 16% while housing costs rose 88%. This was very unhealthy, even though for the sellers, it was a party! As of the end of 2008, the pace of home sales had slowed by 50%. Right now, we are seeing home prices drop by 0.5% per month in our area. In other areas, they are dropping at a greater rate. The expectation is for them to hit bottom sometime during the second half of 2009 or early 2010. With this in mind, a buyer who is in the market right now not only has a wide choice of inventory and reasonable prices, they also have mortgage rates that are incredibly attractive! By later in 2009, these mortgage rates are expected to be history.

For a seller who is trying to decide whether to sell now or wait a year or two "until the market comes back," here is Otteau's projection: If you wait, you will net 10% less than you will by selling today. The drop of 0.5% per month is expected to be in place for at least the rest of this year, followed by a lengthy flat period while the unsold inventory slowly sells off. This will keep home prices flat for the next two to three years. It is only after the inventory declines that we will see the beginning of a recovery. At that time, we will see an approximate increase in home prices of 3% per year. By 2014, prices will be back to where we are today!

Buy now! Sell now!
(c) Copyright 2009, Fran Lichtman & Randy Rabney
Fran Lichtman & Randy Rabney have combined skills and training make for an awesome Real Estate team that has been very effective at both marketing homes and representing buyers.

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