The Real Estate and Mortgage Banking Industries have dominated the headlines in recent months. With so much information on TV, in the print media, and on the Internet, sometimes it’s hard to make much sense of it, and people tend to give way to a “Paralysis of Analysis”. Homes stay on the Market and many Qualified Buyers continue to “Kick Tires”…
I’m asked that question a lot… Obviously, depending on the buyer, one must consider a number of different factors. However, for most people out there who are considering buying a home, now is an excellent time to make a move.
Just take a moment to consider the following facts:
1. There are currently more homes on the market in the Atlanta area than at any time in the recent past…
2. Right now money is cheap… 30 year fixed rates are in the low to mid 6’s. Just ask any of our Real Estate Professionals who were in business in the early 80’s, when rates were at 18%, and they will tell you about a “tough market” (and people were still buying and selling Real Estate then)…
3. Historically, Atlanta continues to be a strong Housing Market. We’re not “land-locked” geographically, and Metro Atlanta continues to “Sprawl”. The job market is strong, the economy is solid, and the standard of living is high– not to mention our beautiful Southern weather (people are flocking to the “Sunbelt”)…
4. Sellers are more motivated than they have been in years. There’s a lot more competition, and Sellers tend to be more willing to contribute toward closing costs than they might have been just a few months ago. In addition, Builders are marketing their new homes very aggressively, needing to move their standing inventory…
5. Qualified Buyers have a wide variety of Mortgage Products and flexible Lending Options to choose from (the programs that have gone away, needed to)…
What does all of this add up to?
Plenty of inventory, low interest rates, a vibrant city, and solid Mortgage options: An outstanding time and place to invest in Real Estate– a “Buyer’s Market”.
Too many people get caught up in watching the national media and their “Doomsday” forecasts. Unlike many other cities around the Country, Atlanta has not “Overheated” in the past when the Housing Market “Boomed”, and in turn hasn’t “Crashed” when the Market corrected. We are currently in the middle of one of those necessary “Market Corrections”. Don’t over react– “This too shall pass”. I encourage my clients to pay more attention to local/regional economic reports and trends, and to plan accordingly. Much like many Wall Street Investors tend to “attack” when the Market is down (seizing upon great deals), now is a great time to employ the same strategy.
Much has been reported recently about the “Credit Crash” in the Lending Industry. The truth is that ever since the Refi Boom, some Loan Products were being originated and sold that never should have been offered in the first place (hindsight is always 20/20). Investors have tightened guidelines in response to delinquencies, foreclosures and credit risks, in the same way that any Industry would. Credit-challenged, 100% Stated Income, Interest Only, Short-Term ARM’s were a “disaster waiting to happen”. Values came down, ARM’s adjusted, and with no money or equity in the deal, many people chose to simply “walk away”. More responsible Lending is the order of the day, and a good credit history, with money down will never go away. However, there are still viable options for credit-challenged buyers, and 100% financing programs currently available– but buyers and Lenders are working together now in a more conservative environment.
It will take some time to clear out the current inventory, and forecasts predict that interest rates should continue to stay reasonable. However, there is still no time like the present: If you are considering buying Real Estate, and especially if you don’t have a property to sell, now is a great time to purchase… If you do have a home on the Market, you might consider more creative Marketing and Financing Strategies for your potential buyers. Why not offer a “Free 2-1 Buydown” for all prospective buyers? (You pay 2% of the Loan Amount to buy their rate down for the first 2 years on a 30 year fixed: 4.375% the first year, 5.375% the second, and 6.375% for years 3 through 30). On a $300,000 loan, you will have contributed $6000 to save your buyer almost $7000 in the first 2 years of their Mortgage. Don’t you think that will make your house “stand out” a little more than the one “listed” right down the street? (AND it will cost you less than lowering the sales price another $10,000). Builders have been doing this for years; why not use financing alternatives to sell your home? In a Market like this, you just need to get a little more creative, to differentiate yourself from your “competition” (all the other comparable homes for sale in your area).
As always, who you choose to do business with is a very important decision. Building the right “Team” around you can make all the difference. Find a competent Realtor with a great reputation for professionalism and integrity. Find a Lender that you can trust, that has the resources, programs and products to get you what you need (Lenders are going out of business weekly– stick with the companies that are liquid, diversified, and well-capitalized. Stability and longevity are very important in today’s ever-changing market). “Shopping” merely for the best rate, can prove costly if you wind up with the wrong Company…Make sure that your Realtor and Lender have a good “Team” around them as well: Attorneys, Inspectors, Appraisers, Insurance Agents, etc… All of us will need to work together, so that your whole transaction is smooth, hassle-free, and that you close on time– with no “surprises”.
It’s a very interesting time in our Industry. Gradually, the Market will turn as it always does, and the cycle will continue. In the current situation we find ourselves in, some unique opportunities present themselves– be prepared. Align yourself with the right professionals, do your homework and you might just find the “Deal of a Lifetime”. Now is a great time to buy, and Atlanta is a great place to live… Good luck out there!