You've probably heard the news that another round of foreclosures is going to slam the U.S. economy again this year. In fact, in 2009 foreclosures are widely expected to exceed last years figures of 2.7 million by an additional 1.1 million. For home buyers and investors, that means bargain prices on foreclosed homes may still be available until mid 2010. By that time it is expected that the real estate market could begin a stabilized recovery. Another factor that plays a looming role in the 2010 real estate market is the threat of rising mortgage interest rates caused heavy inflation and the dramatically rising federal deficit. No one really knows to what degree of severity these factors will affect the nation's economy but almost certainly it will have some negative consequences. However, real estate bargains should be out there for the taking both locally and abroad. Some neighbourhoods will be more disproportionately impacted than others simply because certain price bands tend to be more vulnerable. Also, it seems that the period between August 2009 and the end of the year will be the most favorable for purchasing a home since it will probably will be in the middle of the next wave of foreclosures and because it will precede the period in which interest rates are expected to rise significantly (which would increase the cost of a mortgage).
Meanwhile, in Fort Worth, Texas, we visited with two families only last week expecting that we might list their homes. After our usual market presentation, our prospective sellers realized they have negative equity in their home. Both families discovered they would ultimately need to bring money to the closing table should they at some point be fortunate to receive an offer. Being discouraged, both families decided not to list their homes at this time. Considering their individual circumstances, one is left to wonder whether these families might ultimately succumb to foreclosure.
In the previous 3 months or so we had limited reprieve (even stabilization) in many areas in the local Fort Worth market because the listings we took were owned either by sellers that were in much better financial circumstances and/or who had equity in their property. Prior to that time however, we often found ourselves delivering the unpleasant news of a mostly bad real estate market to prospective sellers in the middle of a listing interview. We were immersed in a market where people often could not afford to sell their homes. Bad as it was for them, we realized that circumstances were even worse in many other parts of the country. Now it seems that we may indeed be heading back to a foreclosure market again!
Bad news is not necessarily bad for everyone! The bargains that result from the foreclosure market are good news for those buyers that are actively searching for a home at a really great price! For sellers, not all neighbourhoods are affected by foreclosures. The good news is, overall Texas still remains one of the most stable real estate markets in the nation.
Practically speaking, no one can time the market and really know when is the best time to sell or buy real estate anymore than one can predict what the stockmarket will do next. You may find that putting off listing your home for another year could land you in the middle of a really bad housing market which could make the previous year look like a seller's market. It really does us no good to put off buying or selling real estate for a better day, because even the experts can only guess what the future holds for the real estate market. The news that you read or hear on TV generally covers broad market conditions which could be very misleading and probably is inaccurate for your local market! In timing our decisions, we are relying on good luck which often results in pure folly. It is probably best not to gamble with the future when you have the advantage of knowing the present. All that remains is finding the best agent to help you make sense of what is going on now! Besides, doesn't it make sense that even if you sell your home today for a discount that it stands up to reason that you can recover your loss with a discount on your next purchase?
If you would like to know more about how to find a home at a great price or if you would like to have a free no obligation home listing consultation for the sale of your current home, please call either me at 817-480-8425 or Terri at 817-269-1660 to set up an appointment.
Regards!
Bernie Christian
