Real Estate Roller Coaster Ride

Dear Readers, Friends, Neighbors, and Family, Welcome to the Real Estate Roller Coaster Ride. Prices historically go up over the long term, but it is normal for there to be peaks and valleys on the way. The most recent peak was so high that many investors and home purchasers bought and refinanced homes for as much as 30-40% more than they are currently worth. If they keep their homes for decades and can qualify to refinance at the current historically low interest rates, they will come out ahead in the wash. If on the other hand they have experienced financial hardships in recent years they are poised to lose a significant amount on their investment. For those who have lost their homes in this way, the devastation continues for several more years due to the impact short sales and foreclosures have on one's future ability to buy and even to rent. That being said, this is the eighth month since I started using the term, "soggy bottom" to describe where we are in the current market. The transition between Buyer's Market and Seller's Market is slowly occurring as if in slow motion. The increase will be hardly noticeable to those of us who thought homes should sell in a week or two with multiple offers for way over asking price. The traditional market nationwide has always been that a home takes about 6 months to sell. Longer than that and we are in a Buyer's Market; less than that and we are in a Seller's Market. I just had a listing close which I listed in the first week of December. It closed in 6 months and 2 weeks, but it was also one of those very trying sales about which you have hopefully only read, not experienced. That would indicate that we are still in a Buyer's Market, except that short sales take longer than even foreclosures to close often. And in this case the property was listed with several agents, including myself before over the previous fews years. The good news is that short sales tend to sell for more than foreclosures. Which brings me to the point that if the longest types of sales are taking just a little longer than the turning point then what is happening to regular sales? The ones I am watching in our area are selling in less than the 6 month marker which says we are already in a Seller's Market. The adjustment in the market is only really visible when a house for sale is realistically priced remembering that our values are back to about where they were over a decade ago and staged well to compete and invite homeowners to want to beat out the competition who want the same house. The perks for the sellers are not having to wait in limbo so long and closing costs for transfer taxes are much lower than they were at peak, saving homeowners money on both the selling and buying sides. For homes that need a lot of work or are not looking their best, prices are still under market due to the obvious work required to bring them up to par. All in all, the mood is optimistic for people wanting to buy and sell homes and a bit of normalcy is returning to the market. For those who are just now coming to terms with their banks on mortgages that are in arrears, the national banks are making some headway in creating systems to get decisions made and process contracts in a more transparent manner. It will be a long while for our area to process these lost homes, and home values will hopefully not be skyrocketing anytime soon, all good news for our daughters and sons who would like to join the ranks of homeowners in living the American Dream where their hard work can buy them a piece of their own property in America. Many thanks to my friends and their families who have served and lost loved ones defending our way of life. Best wishes for a safe and happy Memorial Day, Linda