We’ve been overwhelmed by bad news, at times avoiding radio and TV news, newspapers and websites. It’s hard to feel buoyant in this environment, but for those interested in real estate and buying or selling a property, it’s worthwhile to step back for second and take an overview of what is happening.
You’ve probably heard that this is a good time for first-time buyers and those looking to trade up. That’s true, but there is more to it than that and those with the sophistication, available cash and solid credit rating can benefit if they think their way through this period..
Simply put, the buyer is in a power position like never before. Unlike many people earlier in the decade, they do not feel priced out of the market as long as their expectations are realistic. In fact, 65 percent of current transactions are below $1 million and only two percent are between $2 and $3 million. Something is available in most price ranges. Buyers can get a bargain in a prime city where the potential exists for a great deal.
Yet, there are caveats and this is where the buyer has to be careful. With the flood of new condo developments, the market is stuffed with excess inventory market and some of the larger properties are auctioning off units, not a good sign for a building. These auctions, however, seem to be taking place in what I call the mass produced buildings.
Holding its own are the smaller boutique-type buildings that have interesting design and where the product is unlike its neighbors. Many of these properties are conversions. While they may suffer additional decline, it appears they will maintain value, especially in prime neighborhoods.
Buyers over the past year have become more sophisticated and are now looking for quality rather than glitz and they know they can be patient. There are numerous distressed sellers out there who present an opportunity for the buyer, who understands value, to get a great bargain.
My advice over the past several months still holds. This is not a time to buy as an investment, but as a home. While I am confident that based on historical trends the market will rebound and eventually flourish, it may take several years for the real turn-around to begin. First thing is to look at your lifestyle and whether your family needs more space. Then determine what you can afford, and remember, lending institutions are requiring more down payments and solid credit ratings.