DON’T JUST READ THE HEADLINES
Often they are misleading. Unless you were personally caught up in the sub-prime mess, 2007 was an exceptionally good year for buying a home, actually the fifth best year in real estate history!
Remember, the housing market is a relative thing. Taxes are structured to accommodate the premise that when most people sell a home they are also buying another one because they need a place to live. There are financial incentives encouraging this timely reinvestment theme. So, regardless of market conditions, selling and buying a house in a relatively short period of time generally levels the playing field. If you sell in a high market you are also buying in a high market, and if you sell in low market you will most likely buy in a low market.
If you happen to have bought your house a number of years ago, it most likely has significantly appreciated in value, leaving you with a healthy profit. Granted, if you had decided to sell it in 2005 or 2006 you would have maximized your profit to the fullest. But that’s all in hindsight. The fact is, even today, if you decide to sell your house now, you will still get a considerably higher price than if you had decided to sell it in 2004. Not a bad deal, considering what has happened in the real estate market.
Aside from ARMs (adjustable rate mortgages) and sub-prime lenders, fixed rate mortgages from prime lenders still remain historically low. Despite last year’s erratic market fluctuations, fixed rates have now stabilized and are quite low by long-term standards. Lenders are more selective, and you should be, too.
The Federal Reserve Board adjusts interest rates as a means of holding inflation in check while keeping the economy moving. During the last twenty years inflation and interest rates have been high during tight housing markets. However, current interest rates are still surprisingly low. Lower interest rates generally equate to lower house payments and may be a strong motivator to sell or buy during a tight market.
There will always be opportunities to sell and buy a home – make sure the timing is right for you. And always seek the advice of a seasoned real estate professional.
UPDATE . . .
A modest recovery for existing-home sales is expected in 2008 as the impact of the credit crunch subsides. Pending home sales are beginning to indicate near-term stability. The housing market should begin to gradually improve as pent-up demand and an abundance of safer mortgage products becomes more prevalent. Nationwide, the median existing home price has fallen by less than 2% from its all-time high set in 2006.
A LOOK AT THE SEDONA REAL ESTATE MARKET - - -
Coming next month as the stats roll in!!!!!
Read
the December 2007 Newsletter about Sedona Arizona Real Estate Returning to Reality
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