The end of the first time home buyers credit in the second quarter of last year saw the amount of real estate transactions severely decline in the third and fourth quarter of 2010 although the price trends have remained the same. We have been bouncing on the market lows for 2 years now.
The media is conveying a mixed message, some economists are forecasting a further decline and some are declaring this market the bottom and you better get in now. If the current price trends provide any insight, the economists that believe prices have stabilized certainly right in their reporting.
It appears as we hit bottom in the first quarter of 2010 and prices have been the same ever since. The 4th quarter of 2010 was a slow one with most of the sales during that period going to real estate investors and speculators.
What I find particularly amazing is the amount of investor activity over first and second home buyer activity. The first of the year we have seen a change in the overall market, it is now more advantageous to own than it is to rent, a condition we have not seen since the fall of the real estate market a few years ago.
With rentals being in such short supply, real estate investors have been ravenous in their purchase of income properties and it is this investor activity that has been providing the buoyancy and price stability we have seen in our market. Prices are on sound footing due to the demand, great deals are harder and harder to find in the market, short sales have been declining and foreclosures and home path properties are on the market for only a few days after they are listed and then they are GONE!
What remains to be seen is the full return of the second home buyers. This crowd tends to be much slower in returning to the market and they are often under the impression that the good deals they perceive to be there will still be there when they are ready to buy. Many buyers this season are shocked how few good deals are actually there and how fast they go when they do hit the market.
There are clearly two types of money available to buy real estate with, smart money and not so smart money. At the moment the smart money is purchasing properties and building portfolios, whereas the not so smart money is still on the fence about prices. This crowd is waiting for real estate prices to fall further but as the trend displays, the bottom has been reached.
Regardless of what or whom you believe, the investors are here, they are snatching up the good deals. When bank owned properties are on the market literally for “days” before going pending, you should take this as a hint of things to come. The availability of these properties is going to dry up. This is evident in the sharp decline of short sales we have seen come on the market.
If you are a buyer looking for a primary residence or a second home and want that “good deal” there are some things you need to be aware of before trying to compete with an investor to buy an attractively priced home.
Investors can pull the trigger at a moments notice. They view a home and make an offer for the home moments after viewing it. They are also pre-qualified for financing or will be paying cash. Two things that are a requirement for making an offer for most homes in this area.
If you are looking to get a great deal you need to move as fast as they do. If you are meek at heart and you need a lot of time to “ponder” a purchase then you will constantly and consistently loose deals to a savvy real estate investor every time.
Be prepared. Be pre-qualified. Be ready to pull the trigger on the home that fits your needs. And understand that you are not going to “steal” a property from a bank or a seller that has priced a home to sell. You are not the only person interested in purchasing a home in this market. There are plenty of buyers out there. They just happen to call themselves real estate investors and they are a very smart and savvy crowd.
