When everyone is selling. . . buy!

I was reading an article this morning by cnn money writer Les Christie, and it talked about now being the best time to buy a home in the past four years. For those of you who read my blog “2008, Last Chance for deals,” you know I feel the same way.

For years we saw double digit home equity increases in home values and so everyone kept buying. Now we’re suddenly seeing home prices stay stagnant, so everyone wants to sell or to keep on renting for awhile until prices stabilize. But that doesn’t follow market economics. Markets are one of our few chances to be contrarians. If everyone is doing something, you should probably do the opposite!

In this case, if you can afford to buy, now’s the time. Lending requirements have gotten stricter, so I would absolutely recommend talking with a lender first to find out what you qualify for, and more importantly, what you’re comfortable with.

The interest rates are low and the sellers are motivated. Check out the article. It names Louisiana as one of the top undervalued markets in 2008:

http://promo.realestate.yahoo.com/housing:-best-time-to-buy-in-four-years.html

Bywater and Marigny sales prices

I’ve been hearing a lot of projections about how well or poorly the housing market did in the Bywater and Marigny neighborhoods of New Orleans, so I decided to take a look at the numbers. I compared the last half of 2006 (July 1 – December 31) with the last half of 2007 in terms of single family home sales.

In Bywater *
second half of 2006
Homes Listed 37
Homes Sold 20
Days on market 84
Avg. $/sf $125
Avg. Home size 1300

Second half of 2007
Homes Listed 24
Homes Sold 16
Average days on Market 130
Avg. $/sf $130
Avgt. Home size 1500

In Marigny
Second half of 2006
Homes Listed 50
Homes Sold 15
Days on market 98
Avg. $/sf $163
Avg. Home size 1900

Second half of 2007
Homes Listed 36
Homes Sold 15
Days on Market142
Avg. $/sf $156
Avg. Home size 1992

As you can see, in Bywater less homes were listed in the second half of 2007 and less homes sold taking a much longer time to sell, almost twice as long, as in 2007. However, the average price per square foot did go up from the second half of 2006 to the second half of 2007.

That’s a positive sign that even though the market is moving much more slowly than anyone would like, it is still holding its price overall in Bywater. Each home needs to be looked at individually, however. For example, homes that need a little bit of repair must be priced very well to convince buyers to take on the headache of a renovation in this market.

In Marigny in the second half of 2007, less homes were listed, less were sold, they spent more
time on the market and had a lower average price per square foot. However, it’s not all bad news, the lower amount of homes put on the market means supply is starting to regulate itself to demand.

What about all those homes that were listed and not sold? For Marigny in the second half of 2006, for example, 50 single family homes were listed and only 15 sold. What happened to the other 45? In many cases, if sellers could not get the price they wanted in the time they wanted, they often stayed put, or they rented out their homes. There were a very large number of homes that were expired or withdrawn.

What does this mean for sellers? If you want to sell your home quickly and not in the average time of almost five months, you need to pay strict attention to price and make your home look its best. We’re no longer in the market where you can have strange pet smells, pealing paint or messy yards and expect to get top dollar. Helen and I can show you what you need to do to get your home ready.

For buyers? Be reasonable, but make offers! Helen and I can show you what a good offer would be for the home you’re interested in.

* For Bywater, I’m just looking at the prices on the riverside of St. Claude. The Bywater historic district encompases more homes than that, but the houses on the riverside are more similar lending themselves to better comparison. In a later blog I’ll try to pull the numbers for all the Bywater Historic District, which has very varied boundary lines!

2008 - Last Call for Deals?

In spite of the national gloom and doom reports on the housing market, there are a lot of indicators that 2008 may be the best time to get in on a booming buyers market. Both nationally and locally, experts think 2008 may be the bottom of the softening housing market and possibly one of the best times to buy.

First, it’s key to understand that the recent "housing crisis" has been a little over hyped. According to the chief economist for NAR, nationally 2007 was the fifth best year for housing sales ever on record. Home prices declined about 1.5 percent after a 50 percent run up in prices over the previous years.

Secondly, even though the national numbers look good, talking about national real estate numbers is about as helpful for the average buyer as talking about national weather patterns. What is happening in our area, New Orleans?

Local Indicators
After almost three years of post storm rebuilding, the effects are beginning to show. Many flooded neighborhoods are coming back strong while others are just gearing up. Businesses and schools are reopened and corrupt politicians are getting winnowed out even before our new inspector general has started his investigative job. The population is coming back sooner than expected, and they need places to live.

The immediate effects of the storm combined with the tightening of mortgage requirements made for a softening of our market last year, particularly single family homes and condos. However, as the population has been coming back strong, and as many new young people have been inspired to move into the city, the buyer demand promises to be stronger in 2008, and I see a stronger 2009 where many of the deals will already be bought up.

What does this mean for buyers? With interest rates still at historic lows and the possibility of a strengthening housing market, 2008 could well be the best time to buy.

Next blog I’ll talk about some national indicators for a strengthening market.