How to Time the Real Estate Market

A good time to buy? Yes, but no need to rush.

Many housing economists have said that for borrowers with stable incomes, good credit history, and FICO scores of at least 620, now is an opportune time to purchase a home. Although inventory rates are below the long-run average, there still are plenty of options available for buyers.

Are you trying to time the market so you can purchase your home when prices are likely to rise again? You might consider taking a different approach. According to one real estate consultant, while home prices have stopped declining in most areas of the state, and even have risen in many areas of San Diego County, mortgage rates may rise, offsetting any potential savings.

Early last year, the Federal Reserve began purchasing mortgage-backed securities, which helped maintain low interest rates for consumers. However, the Fed’s purchase program ended in March, and some analysts forecast interest rates to increase throughout the rest of the year. One financial publishing company predicts that rates likely will rise to 5.5% by mid-2010 and close the year at 5.75% to 6%. The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) projects rates on 30-year fixed-rate mortgages to average 5.6% this year.

Timing the market, even for economists, is a 50-50 chance at best. What we see now are home prices lower than they have been in many years, along with very low interest rates. For those who are ready to buy a home, this is a very good TIME.

Happy Days Are Here Again!

Bloomberg.com posted the news that Consumer Confidence fell to a 5-year low and home prices as measured by the S&P/C-S Index experienced their greatest decline since at least 2001. San Diego experienced a year-over-year decline of 19.2% Will they drop further? Some say yes; some say maybe; some say no.

So, is anyone out there buying or are they all waiting for more declines in prices? Well, SOMEBODY is buying because we have put in countless offers for buyers and EVERY SINGLE ONE has been joined by multiple offers! This holds true for bank-owned and for short sales. (Most sellers who are not selling short or facing foreclosure are still priced out of the market and seem to be holding out hoping for that one buyer to fall in love and buy their home rather than go through the hassle of buying foreclosures and short sales.)

If you are a buyer who is looking for a long-term investment, waiting for the bottom is risky. Once we KNOW we've hit "bottom," the prices will already have begun to rise. Better to shop now while inventory is up and there are less buyers hitting the market. Good luck!