Many people are sitting on the sidelines waiting for the real estate market to hit the bottom before they make a move.
The question is: Have we already reached the bottom?
Last week you may have sensed that the real estate market may be starting to change direction. It is probably not an abrupt 180-degree turn, yet you get a feeling that the real estate ship may be changing direction and here are some of the signs.
Sign No. 1: If you read one of the recent issues of Newsweek, the columnists are hinting of a positive change.
Sign No. 2: On the Fox business channel on Saturday, one of the financial pundits said he was going to go buy two homes for his children so they do not miss this fantastic opportunity.
Sign No. 3: Ben Bernanke, the Federal Reserve chairman, suggested that the recession may be over by the end of the year.
Sign No. 4: President Obama has switched gears and is now proclaiming the “underlying economy is fundamentally sound.”
Sign No. 5: A local financial services company related that the number of stock market buy orders is starting to increase.
Sign No. 6: The number of buyers we are working with is increasing.
Sign No. 7: The Arizona Republic business columns are starting to speak cautiously optimistic about the real estate market.
Sign No. 8: The number of national new home starts increased last month.
Sign No. 9: The Federal Reserve did not raise short term interest rates and mortgage rates are still at an all-time low between 5 percent to 5.5 percent.
Sign No. 10: Consumer confidence appears to be on the upswing.
In many situations if you are selling and then buying a home, now is a great time.
Here is one scenario: If you want a larger home and your home’s value was $250,000, today it is probably worth $200,000, a 20 percent decrease in value.
The home you wanted to buy for $500,000 likewise has seen its value reduced by the same 20 percent and today’s price is $400,000.
So when is the better time to sell and buy? In the height of the market, you would have had to come up with $250,000 more than the value of your present home.
In today’s market, you would only have to come up with $200,000 more than the present value of your home.
Combine that with today’s interest rates and ask yourself, is now the time to upgrade?
Ray Pugel is a designated broker for Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.