Everyone dreams of owning a new home. Having been a builder for 23 years, I’ve watched the market in its ups and downs. Here are some tips for today’s market.
1) This is a buyers market. The supply is greater than the demand which means there are more homes on the market for sale then the normal amount. This is good for the purchaser because there is more to choose from. The sellers are more eager to sell which means you get the best deal for your money.
2) Interest rates are at historic lows. Since July of 1973 till 1981, fixed interest rates have been between 8.5% and 18.5%. In 2001, they dropped to about 7% and even dropped to 5.25%! Today, the rate is about 6.5%. These rates give the buyer more purchasing power which enables you to buy more for less.
3) Within a year, the market will increase significantly. With inventory shrinking and new homes start decreasing, it makes for a tricky situation. With jobs and population increasing, it will only be a matter of months before the supply runs low and demand increases. This is a sign that prices are at the bottom and it is best to buy right now.
4) You will find a better bargain in the winter months- when the market is slower. Winter time is notorious for being slower for builders and home sales. Builders are trying to keep their crews busy, while sellers are trying to keep land moving.
5) Wages are increasing- according to the Department of Commerce. With real wages increasing and the stock market roaring, the new job market will increase and the idea of owning a new home becomes real for a lot of people. With low interest rates, this enables buyers to buy better quality single family homes at low monthly payments.
6) There is only a two year supply of lots available- in most markets, causing the market to become very competitive. This is a most interesting phenomenon in the market. With the interference of the government and slow growth publicity, there is about a 2 year supply of lots in the market. From 1989-1990, there was over a ten year supply of lots which made for a long recovery. This time with a two year supply, this will intensify the recovery time. In other words, by years end, there will be significant pressure on the market place to increase. You should gain the most appreciation on your property in the next few years.
The market is full of ups and downs, and there are defiantly better times to buy and sell. This is a buyers market, take advantage of it. This is a great time to buy a house and make it your home.
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