|
|
|
|
Who should be Buying!
REAL ESTATE MARKET
OPPORTUNITIES IN 2009
April 2009
 Spring
has returned to Northwest Montana and with it the out of
state buyers who will largely decide the direction of
our real estate market this year with their wallets.
April through August is historically the busiest months
for real estate sales. So who will decide to buy this
summer?
That’s simple – folks who Love Montana and want to Live
in Montana are going to buy! Importantly, that does not
include folks that simply think they can make a quick
buck here. Investors and speculators are still looking
for properties that make sense as long term investments,
but they won’t be major players this summer. Many have
given their opinions about the direction our market will
take this summer – most saying the market will likely
stabilize in the late summer. But buyers are being very
cautious – in negotiations they are making assumptions
that the market may continue to slide say another
10%...how might this affect the buying decisions.
Which direction are
you heading – Up, Down or Sideways?
Buyers looking to Relocate – those moving
Sideways by selling a house and buying another at
basically the same price point – are in good shape.
Market conditions alone should not deter these buyers.
Utilizing a professional Realtor skilled in negotiating
techniques, these lateral movers have the opportunity to
beat the market both on the sale of their current
property and aggressively negotiate on the purchase of
their new home. The basic premise is that if the market
price goes down 10% then these buyers will either lose
10% of the old house or 10% of the new house – in other
words they have the exact same market risk whether they
move or not so the decision is more about where they
want to live rather than one of market risk.
Move-up Buyers Rejoice! These folks stand to gain
the most from a market downturn. The effect on prices is
not uniform – high end properties are down more than
mid-level homes. There is a sort of price compression
that occurs below about $400,000 and gets more extreme
as you move down in price. In other words, a $250,000
house in 2006 might bring $220,000 today, a 12%
decrease; where a $750,000 house in 2006 might only
fetch $599,000 today, a 20% decrease. Since there are
many more homes sold at the lower price point the
average decrease that folks read about in a particular
market may be 15%...
Downsizers??? Ouch, this one can hurt! Take the
above argument and reverse it. You may be looking at a
larger percentage loss than you expected after reading
that the market is “only” down 15%. Truth is that the
market will dictate your sale price and your personal
financial situation will determine your “need” to sell.
The bottom line - if Debt is your enemy today it is not
likely to get any better soon – you’re better off
putting your problems behind you and moving forward with
the rest of your life. If you own your property free and
clear and are in a position to hold it for several years
you may wish to consider doing just that.
2nd Home Buyers – Now is the time to Act! Prices
are fantastic – in many cases well below replacement
cost. Savvy buyers have the opportunity to save huge
amounts by acting now. How long will the buyers have the
advantage – no one knows for sure, but we do know it
won’t last forever. 2nd home, resort and recreational
properties are totally discretionary purchases – these
properties are wants, not needs. Buyers have been
sitting on their wallets for some time now which is
creating pent up demand in the opinion of many market
watchers. Once a few of the best “deals” get sold, the
market should start to generate some solid momentum and
reduce the negotiating advantage Buyer’s currently
enjoy.
First
Quarter 2009 – The numbers are in and we’d love to
tell you what we think they mean for you. Call or stop
by anytime to chat – the coffee is on!
The market is changing every day - Be sure to give me a
call if you or someone you knows is interested in buying
or selling real estate! Thanks!
|
|
Northwest Montana Real Estate
love montana. live montana.TM
