Is it gutsy - or just foolish - to buy in this market?
Brace yourself, for I am going to sound like I just chugged the Kool-Aid at a Realtor sales convention.
I swear I haven't gone anywhere near Orlando or New Orleans.
But this could be a good time to buy - that is if you are brave enough to take the plunge.
Sellers are a notoriously stubborn bunch here in Greater Boston, but anyone looking to sell right now is going to have to come down on price. And, as I noted recently, they may have to update that tired kitchen and pretty up that dingy old bathroom as well.
For buyers, then, there are opportunities out there - provided you can stomach the downside of buying a home in a declining market.
And let's be honest here - if you are worried about where the market is headed, as you should be, there are some real issues to take into account.
This Bloomberg piece offers a great road map to all the challenges facing today's real estate market - and by extension buyers and sellers.
- Prices fell again in the fourth quarter, by 4 percent, according to the Federal Housing Finance Agency and 4.1 percent in the top 20 metro markets, according to the Case-Shiller index. And just wait until those first quarter numbers come out.
- Sales of foreclosed homes accounted for 37 percent of all sales in January, according to the National Association of Realtors.
- The number of people intending to buy real estate fell to 4.4 percent in February from 5.2 percent in January, according to the Conference Board.
So if anything, home values are headed down again. While prices fell .1 percent during the fourth quarter here in Massachusetts, what that stat doesn't show is the downward pricing momentum that has been building for months - and is just starting to show up in the numbers.
OK, so why buy now and watch the value of the home you just bought fall again? Conversely, why not wait a year or two in hopes of getting an even better deal?
Both are valid options, and if you are just hanging out and casually poking around the market, then sure, by all means, stay on the sidelines.
But if you have been waiting for years - maybe your family has outgrown the house you are in - and you are financially ready, then I say go for it.
Buying a home should be a long-term commitment - if you know you won't be able to stay put for at least ten years, then rent.
I am not saying take heart, the market will be booming again in ten years. I have no idea. But time has a way of smoothing out price fluctuations.
Of course, this advice is coming from a guy who embarked on a $200,000 renovation/addition to his creaky Natick fixer-upper in September 2008. You may have reason to question my sanity.
So what's my point? Yes, you need to be aware of the current market dynamics, But don't be paralyzed by them either.
