Tell Your Buyers Not to Wait for the Bottom!

Question: I am ready to buy a house but I want to make sure that I get the best price. How will I know when we are at the bottom of the market?

Answer: It is quite possible that we will look back at this market next year and recognize that 2008 was the best time to buy. Any broker that has experienced several market cycles will tell you that you can’t time their exact peaks and valleys. The bottom of the market will only be apparent after it has been passed and prices have begun to increase.

Inventory levels along with other leading indicators now point toward the beginning of market stabilization. Prices will most likely continue to decline a bit more because there is always a lag between the bottom of the sales curve and the bottom of the price curve.

But consider this. Interest rates will most likely begin to rise later this year or early in 2009 due to serious inflationary pressures. A one percent increase in mortgage interest rates will more than offset any savings from future price declines, making affordability greatest right now.

The April 18, 2008 Kiplinger Letter supports this by stating, “More and more buyers won’t wait much longer to try and catch the absolute bottom price. With mortgage rates at low levels….qualified buyers are pulling the trigger.”