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Saturday, March 8, 2008
What Investors Know: Don't Wait for The Bottom of the Market...
Categories:Arizona Market Trends,Arizona Real Estate,Arizona Real Estate Blog,Buyers,Chandler,East Valley Homes,Gilbert,Scottsdale,Sellers,Tiffany Cloud
There has been a lot of buyer anxiety rampant in Arizona the last year and a half and with good cause. Prices have declined and there wasn't any indication that the bottome was anywhere near. I believe we have indications of a bottom and I wanted to share my thoughts on the matter.
I personally feel by looking at stats, talking to professionals in Title, Lending and other REALTORS, and being involved in the Arizona Real Estate market full-time ...this is the time to buy - period! While many potential buyers are waiting for the absolute bottom they fail to realize is that we won't know where the bottom is until 3-6 months after the fact. So here is my question to those of you who are hesitant:
· Is it better to buy on this side of the bottom of the curve or the other side of the bottome of the curve? Investors know that it's better to buy before the media starts declaring the market is headed up. Sellers are more motivated to sell when they feel the bottom has not been hit yet. Once it is obvious that things are headed back up, it will be harder to negotiate those 'screaming deals' with those same sellers. In addition, some experts have speculated that there has been so much "pent-up buyer anxiety" from buyer's waiting, that once they do feel the bottom has been reached there will be a frenzy of purchasing that will fuel the upswing of the curve much more quickly than most people anticipate. This would be especially true in
· Consider This: Our inventory has decreased for 3 consecutive months now. We usually see inventory rise in Feb/March as people get their homes on the market in anticipation for our spring/summer buying season. That has not happened so far.
· Consider This: There are fewer new home builder permits being issued and absorption is starting to happen in the New Homes sales market (which has had a huge impact on our inventory for resale homes)
· Consider This: Valley wide absorption rates of single-family detached homes in Maricopa county have gone from over 20 weeks just several weeks ago down to 15.74 weeks.
· Consider This: We have 100% financing back, we have the Nehemiah gifting program back for down payments, FHA loan limits rose this week to $346,250. All of the sudden, we have financing available to us for buyers that we haven't had in almost a year.
· Consider This: The most recent data from the AZ Multiple listing service shows that of homes closed, 20% of them are cash sales! Cash sales are second only to conventional financing right now. We are used to seeing about an 8-10% of closed homes paid for with cash. INVESTORS ARE BUYING HOMES FOR CASH because they know this is the time to buy!
Don't re-invent the wheel. Investors have cash to buy because they know how to make money. If they are buying now you should be too. Whether you are buying a primary residence in Gilbert, a secondary residence in