I went to a housing trends seminar this month and learned some really good information. The first thing is that Bank of America is going to start putting foreclosed homes back into the housing supply 1/15. We are expecting a flood of homes on the market for Spring 2011. Because of that, housing prices will continue to drop or be soft for a while until that supply is sold. Foreclosed properties bring about 59% of their current market value, so all values will decrease as they are used as comparables for appraisers.
We expect to have more buyers out there, too, but with so much on the market, prices won’t increase. The other factor is interest rates. Interest rates are expected to climb steadily throughout next year making the cost of a home more than it is now. We’re talking only about 2 points,but buying now is cheap, so we are encouraging buyers to buy now.
So what’s the moral of the story? It’s a great time to buy if you’re looking. The bad news is… it is time to sell at a “compelling” price. Competitive pricing isn’t doing the trick anymore.Home prices are predicted to decrease over the next year and won’t be back to the values they are now till mid-2012. If you think you will sell your property in the Spring at the current price, you are probably going to be mistaken.
Here are your options:
1.Decrease your price now to a price that buyers can’t refuse. I doubt you want to be part of the competition in the Spring.
2.Take the property off the market and rent for 2-3 years and then try again.
This was an eye-opening seminar that I went to and I wanted to share what I learned with you.