What do you do now?
You’ve been making offers but it doesn’t seem like you are getting close to buying anything – with some listing agents you don’t even get a response!
The mainstream media makes it sound like prices are going up, but they don’t explain why. The underlying economic fundamentals make you nervous, and the government support can’t last forever, can it?
Thoughts to ponder:
Buy when everyone else isn’t – The competition will dwindle after November 1st because the clocks roll back an hour and people won’t be looking at houses after work, just mostly weekends. The holidays will be in full swing, and it’ll be too late to close by November 30th. After the frenzy we’ve had lately, buyers will want a break – expect fewer competitors through the end of the year.
Homebuyer tax credit – it won’t matter now if it gets extended or not. If it doesn’t, buyers will take a break. If it does, buyers will take a break anyway because they’ll figure that they’ll have at least six more months to take advantage of it. If it doesn’t get extended and the $8,000 is a big deal to you, get it from the seller.
Lousy inventory – There wasn’t much to buy in 4Q08, and unless the tsunami starts rolling soon, it’s going to be a very dry 4Q09. We’re tired of hearing it, but insider rumblings indicate that relief is on the way – there are too many properties in default for there not to be additional REOs coming.
Loan Mods to Fizzle Out – Six months from now loan mods will be a distant memory – they aren’t working, and the lenders are giving up. It used to be about 2:1 rato of NODs to NOTs, but the banks are throwing down, and today in San Diego County they are about even; 10,582 NODs outstanding, and 10,023 Notices of Trustee Sales.
Seasonality – There is seasonality in the sellers’ mindset. They are overly optimistic during the hotter spring selling season, and desperate around the holidays. Did you notice that the spring kick was a dud again? Sellers are their agents held out wondering if it would get better, but it never did – once they got more realistic towards the end of summer, properties started moving.
Consider Compromise – Keep waiting patiently for the right house, at the right price, but if you wanted to improve your chances, look a little harder at the fixers, and the short sales. Those are the ones holiday buyers will shy away from, and you stand a better chance of stealing.