RECESSION PROOF HOME BUYING

Recession Proof Home Buying In Truckee, California – Bonnie Jessee, Dickson Realty

Good homes sell even in a bad market — and here are a dozen principles the experts watch for when evaluating a potential sale.

By Marilyn Lewis

The real-estate bust has stripped all the smoke and mirrors from the housing market. In the starkest way possible, it is revealing which homes hold value in a recession, and why.

“Even in this market, there are certain things that will sell,” says real-estate agent Michelle Sandoval in Port Townsend, Wash., where it’s difficult to sell homes, although prices haven’t dropped.

“Even in this market, I’ve had things sell for over full price. There are always bulletproof properties” that hold value better, Sandoval adds.

Certain upgrades can help recession-proof your house, but your home’s price resilience mostly depends on choices you made when you purchased. Since most homeowners buy and sell several times in their lives, you’re likely to have a chance to use these bulletproof principles the next time you buy.

Location, location, location

You’ve heard it before because it’s true: Location matters. It matters most, in fact, when it comes to holding value under pressure. Why? Because houses are replaceable, but land is not. If you’ve got a spot everyone wants, your place will sell faster and for a better price than a similar house elsewhere.

Take Punta Gorda, Fla., where, at this very moment, house prices are sliding so fast you can almost hear them sink.

“Everything is depreciating,” says Cady Rowe, an agent with Coldwell Banker Morris Realty in Punta Gorda. However, Rowe adds, how deeply your price depreciates depends on where “your dirt” is.

“If your dirt is sitting in Punta Gorda Isles on the waterfront, it’s going to be worth a lot more than dirt somewhere else with a thousand lots just like it,” Rowe points out.

A December study by Moody’s Economy.com predicted price declines in Punta Gorda will be the worst in the nation — down 35.3% by the second quarter of 2009. And that’s not accounting for inflation.

SIGNS IT IS TIME TO BUY YOUR NEW HOME!

HOW TO KNOW WHEN TO BUY YOUR NEW HOME

 Six Signs It’s Time For Home Buyers To Buy

by Blanche Evans

If you’re waiting for signs of a housing bottom, join the club. Nobody blows a whistle and say, “It’s time to buy!”

That’s why market timing is an art, not a science, but you can improve your odds of buying wisely.

First, stop paying attention to the national media. Fear has sidelined buyers even in good markets, and that’s exactly when you need to take advantage — before other buyers wise up.

Second, be ready to pounce when you see the home you want.

The time is right to buy when you see these signs in your marketplace:

• Inventories start to decline. That means that the best buys are leaving the market, and best doesn’t necessarily mean cheap. It means the homes with the highest likelihood of profitable resale. Desirable homes will leave the market first.
• Days on market reduce. Days on market refers to the period when a Realtor enters a home in the MLS for marketing to other brokers, until the home sells. When DOMs are shorter, that signals a coming seller’s market. A seller’s market has more buyers than homes, so prices go up and selection goes down.
• Mortgage applications increase. Interest rates recently turned back the clock, causing many homeowners to jump in and refinance. Purchase applications were also up. Either way, that means homes are about to leave the market, so less inventory means firmer prices. Sellers will stop dropping their prices.
• Sold homes go for closer to listing price. In 2007, home prices dipped for the first time in four decades. With a 1.9 percent decline, homes still sold within 97 percent of listing price. When they get to 98 percent, you’d better be ready.
• Prices remain firm or rise. Prices are a product of demand. To attract buyers, sellers reduce their prices and offer more incentives. If homes are selling reasonably well, prices won’t move downward — they’ll go up.
• Incentives disappear. When a market begins to favor sellers, they don’t have to do as much to sell homes. Watch new homes and see if builders are still giving away swimming pools and granite kitchens. If they aren’t, times have changed.

Any change in condition will change others, so again — be ready. Now’s the time to buy a better house while prices are low, interest rates are low and inventory is still high.

Published: January 22, 2008