How Low Will the Home Prices Go?
As the housing market continues to decline, many people are wondering
just exactly how low the home prices will go. While it might be fun in the ever
popular party game to see how low you can go, when it comes to real
estate it can be somewhat dicey to determine whether you should buy now
or continue to hold out and wait to see if home prices will go even
lower. According to the National Association of Realtors, it is expected
that the market will experience a sale recovery sometime during the last
portion of the year 2008. Of course, considering the source of the
information, it is somewhat difficult to rely on this forecast 100%.
Certainly the more than 1 million NAR members are sitting on pins and
needles, waiting to determine whether their median earnings will
continue to fall or experience a resurgence sooner rather than later.
In taking a further look at statistics, it quickly becomes apparent that
the turn-around that has been greatly hoped for by most real estate
agents is not going to occur anytime soon. This is evidenced by the
overall decline that most realtors are seeing in contract signings
around the country.
In considering whether the real estate market will stabilize or continue
to fall, it is important to look at a variety of factors. Location has
always been an important element in the real estate market, but it has
never been more important than it is at the current moment. There are
some markets that have actually experienced upswings, despite the
current state of the real estate industry. Within these markets, it is
not uncommon for home sales to double over the previous year. Then, of
course, there are those markets where contract signings have essentially
been cut in half.
Location is not the only factor that can affect price conditions;
however. Price conditions have been proven to vary significantly even
within the same locality. One of the primary contributing factors to
this phenomenon is whether a neighborhood has access to subprime loans.
Individuals who are considering purchasing a home should definitely take
the time to do some research ahead of time in order to make sure they
understand the various factors regarding the area in which they plan to
purchase. It should also be understood by prospective home buyers that
they are definitely facing a buyer's market. The rapid decline of home
prices as well as the large price declines themselves has certainly
enticed a number of buyers out into the market. As a result, if you have
your heart set on a home it may not be a good idea to wait it out to see
if prices will fall even more or you may find the rug pulled out from
beneath your feet, so to speak, by another buyer.
Despite the current state of the real estate market, there have still
been reports of multiple offers on certain properties following
significant price cuts. This means that it is entirely possible that the
largest price cuts have already occurred within these areas. While this
may be a situation that is isolate to particular locales, it should
still be understood that the possibility definitely exists that prices
will not continue to drop further within those markets.
When considering whether prices will continue to fall, the rising price
of energy costs and the economic struggle which many people are facing
should not be left out of the equation. Estimates indicate that there
are at least 120 million homes situated within the United States. Around
30% of those homes are owned with no mortgage. The remainder of those
homeowners is responsible for not only the everyday costs of maintaining
a home but also a mortgage and insurance payments as well. As a result,
it is estimated that some 5 million homeowners who are already at risk
of potentially losing their home may be joined as others as a result of
escalating energy costs when homeowners realize they have no other
options left available to them.
Ultimately, the key to determining whether you should try to wait it out
a little longer to determine whether prices will continue to fall or
whether you should act while the iron is hot will depend on your
individual situation and the locale in which you plan to purchase. Make
sure you take the time to do some thorough research to determine what is
going on within your local market and determine whether now really is
the right time for you to purchase.