You better buy now! You better hurry or else the market will run away on you! I am trying to create a sense of urgency here to get you off the fence.. (as someone has consistently implied that I do)
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Okay as I have harped on alot lately, the current market is schizo. I can honestly say I have not seen this much activity for 2-3 years.
So why am I posting this? Simply to comment on some possible strategies.
First off the best strategy I can give is that if you are currently looking for value this spring, my advice is to go enjoy your weekends at the beach instead of looking for homes. Most anything you find that shows well and is priced aggressively will either have multiple offers on it, have offers into the lender if it is a short sale, or have some bizarre extenuating circumstance if it is not in escrow already.
The fact of the matter at present is that I would advise people to seriously put on the brakes. We have a confluence of events that is pushing sales activity substantially. The low mortgage rates, government incentives, buyers running out of patience, constrained inventory levels, aggressive pricing, FHA and VA loan availability, and also the fact that contrary to the thinking of many, there are people with money out there, we are seeing alot of purchases getting done.
Does that mean you should or should not buy? Well, as usual just know what you are getting into. Is this a market bottom? Not even close, that is a joke. Are some areas closer then others to a bottom? Yes of course.
The thread on the board about treasuries is important. If treasuries blow up and rates fly into the 8% range and above that would be catastrophic to the housing market. Talk about a tapout…
One possible strategy is that if you are going to buy you may be able to let the appraiser do your dirty work. In a few transactions I have been in for buyers lately my clients had to overbid the property. They did so because there were other offers and they wanted to be in escrow and then let the chips fall where they may. In both cases the appraisals indeed did come in lower then the accepted offers and they both got the seller to reduce pricing to the appraised value. Note however they would have never been able to do this if they did not overbid to get the offer accepted. They both were very tired about getting outbid in properties.
Now should you do this? I don’t know. Will it work? Maybe or maybe not, it is a calculated risk and knowing the comps gives you an idea of whether it will work or not. Even if it does not you can back out.
Again though, the message here is to realize what is going on out there. To seriously consider taking a walk for 6 months or a year and let this activity subside. Let’s see if some of the catalysts that we know are out there such as increased unemployment, and the continued poor economy will suppress this. Let’s watch Obamanomics take hold. Let’s see how things pan out when taxes are raised, when some of these stuped foreclosure moratoriums subside. If you can’t wait, just know the conditions you are coming up against.
