Today’s Real Estate Buyers Want to Stay Within Budget
Welcome to 2010! Buyers in today’s real estate market are reluctant to push the limits of their budgets. Unlike the buyer in the hot 2005 real estate market which instilled major fear that
“if you do not buy today, you will be priced out of the market tomorrow“, today’s real estate buyer is more cautious and wary. There are multiple factors that have caused this prudence. The general economy, the falling real estate values (why buy today when it may be worth less tomorrow?) , fear instilled by observing buyers who are now ‘upside/down’ on their homes and recession / job loses. Bottom line, we are all afraid to enter into debt in this time of uncertainty.
The previous attitude of ‘buy before you are priced out of the market’ coupled with the fact relaxed loan qualification standards were major instigators causing the real estate bubble waiting to burst. Prices were rising unrealistically. Owning the American dream became a real nightmare for many! Unfortunately, all property owners suffering if after affects of the bubble that eventually burst. Even if you did not purchase in the height of the market or dip in to the artificial equity of your home, your home value has been affected by the repercussions of today’s foreclosure/short sale market. Every community and neighborhood has been impacted.
Not only are buyers being more cautious about staying within their budget, lenders are ‘forcing’ them to purchase within their budget. The pendulum has swung from the days of relaxed loan qualification guidelines to a very stringent qualification process. In the end, this more thorough requirement process will be beneficial to all.
Many markets, have hit ‘the bottom’ in pricing. One does not know where the market “bottom” is until it starts to improve. And, that is what is happening in the greater Phoenix metro area. Most forecasters agree that the Phoenix area real estate market hit bottom in April of 2009. The sales prices have stabilized and have slowly improved since that time. There is an optimistic outlook for 2010.
Although the first time home-buyers tax credit or 2009 resulted in a pent-up demand from a large pool of qualified renters to purchase, there still remains many renters qualified to purchase a home. The extended first time homebuyer tax credit and new expanded credit to current homeowners meeting certain qualifications, along with lower prices on properties and record low interest rates will continue to stimulate many renters to purchase. This will be a boost to the overall real estate correction.
Now is the time for homebuyers to take advantage of the tax credits, inventory and interest rates while being able to conservatively remain within their budget to purchase.
The 2010 real estate market is a more favorable buyer friendly market to
“buy while you can afford it before prices increase”
than it was the case in the frenzied height of 2005.