2007 2nd Half
I guess everyone is ready for the fall of 2007. Depending on who you talk to this is either the bottom of the barrel for Arizona or we still have some downward pressure. Personally I believe we are at bottom. It's just got to get better, after all the heat will be gone in about a month, so heats off and cool is on. Or at least I hope that applies to the real estate market. We do have mess to clean up however. What do I mean?
Well we have house on the market which remain over priced for market conditions. That means there are a lot of sellers which will either have to forget their plans for a future purchase and wait until the market catches up to their needs or a short sale and even a foreclosure maybe in the future. Not a particularly pretty picture.
Buyers are sitting on the sidelines in many cases for a couple of reasons. The first is they can't qualify. Loans are tougher to get. Second, the don't want to put down 20% for a loan, 0 down loans are almost extinct (except for some FHA loans) and last, they think the bottom is yet to come. Buyers need to understand how they can use FHA and seller contributions to help them get the loan they need and at the rate they need. As a Buyer right now, I would want to make sure I am working with a real estate agent who understands what it takes and who can help them find lenders who work with FHA and other programs.
When someone tells me they are waiting for the bottom, I can't help but think about the parallels to the stock market. Waiting from the bottom there never works either. Flippers in either market often win big but they also loose big. If you are planning on staying in your home for a while, the difference in purchasing a home now and waiting for the bottom is minimal. Waiting often means missed opportunities for purchasing the home you have always wanted. Financially it frequently is just not significant enough to make a difference.
The market will flush itself out eventually. Homes will sell and buyers will buy. Now is the best time for buyers and not so great for many sellers. But the market will cure itself. Waiting on the sidelines will only result in buyers missing the great opportunity and result in a longer time period for recovery.