Prudential NorCal Realty’s Fox Team » Nobody Rings a Bell At The Bottom of the Market!

The headlines make it sound like the world is coming to an end–as if we have never before experienced the same types of economic trials that we are going through today. However, while the headlines may be factual, they are not accurate. Headlines are, understandably, written to sell newspapers. When it comes to our real estate markets though, those same headlines are perpetuating misconceptions about our markets and not providing proper and detailed perspective to the reader. There is another side to the story.

An adjustment in the local real estate markets was not unforeseen. Experts noted at that time that a 20 to 25 percent annual increase in values over a 5-year period could not be sustained. While Sacramento County as a whole has seen a 13.7% decline in median home prices from September 2006 to September 2007, not every city in the area experienced such a steep decline. Although median prices have corrected themselves somewhat, they are still well above median prices of 10 years ago.

A correcting market is historically followed by an improving market. Real estate is a long-term investment. The 2008 California Association of REALTORSâ Economic Forecast indicates that an individual buying a home in 1995 during the last turndown has, on average, realized equity growth of approximately 250%, in spite of the market’s current correction. According to CAR statistics, across California the average home seller put $180,000 of cash into his/her pocket through August 2007.

Markets that are tough for sellers are bonanzas for buyers. In the current market, opportunities abound. With median prices mitigated somewhat, homes are less expensive than they have been in several years. Interest rates remain at close to their historical lows. Inventory remains at higher levels than at any time during the first five years of the decade, allowing for multiple choices for those desiring to own a home. Despite the headlines we read every day, there are plenty of loan products available. Buying a home now may prove to be one of the best long-term investments available in years.

No one knows how long this current window of opportunity will remain open. When the market changes, it will likely change relatively quickly. No one will ring a bell to let us know we have hit the bottom of the market and an upswing is taking place. It will take several months before the statistics catch up with the market and we can say, “That was the bottom”, just as it took several months to know exactly when the top of the market occurred.

So what does this mean to the average consumer? Do you know someone who would like to purchase a home? Advise them to contact their professional Realtor so they can begin to understand the home buying process. A Realtor is in the best position to educate about the process; keeping the needs of the buyer in mind, helping to find the ideal property, and prepared to see opportunities that are ready to be taken advantage of.

Nobody Rings a Bell At The Bottom of the Market!

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