Diamonds In The Rough
Given the position of the overall market and where it's gone over the past 12 months, there are now many properties that have become the cliche for an undervalued asset. What was once $329,00 is now $269,900. From $949,900 (appraised at $1,200,000) to $799,900 on prestigous North Meridian Street, no less. As the line goes.....'if I had a million dollars...' I'd either be buying a precious metal or Indianapolis real estate. It's very nearly gotten to the point where buying a home in the current interest rate climate is less of a decision than an eventuality for those truly analyzing their housing options. Savy home owners toying with the idea of moving up now have an added sense of urgency as they watch their potential for buying up a full price point become a nearly neutral revenue move. While this mindset has not become a panacea for frustrated sellers looking to liquidate an asset, it will eventually be the cure for a vastly over supplied market.
There are gathering clouds on the horizon that may still be cause for concern throughout the Spring season. Come March of 2008, increasingly tightened FANNIE MAE and FREDDIE MAC lending standards due in part from the sub prime troubles will also affect the current market. First time home buyers will be facing a whole new game this year compared to 12 months ago. Reflecting on the more current history, the overall market data for the 11 county metro area has still been sluggish with roughly a 30% decline in units of real estate sold in January of '08 compared to that of January of '07. Pricing strategy is now comparable whether one is selling a home at $200,000 or $1,000,000. Considering that 9.8% of all listed homes are selling during their initial 90 day marketing period, a seller must now be priced in the most aggressive 20% of their compeitors to have a chance at entering escrow. Every day we still hear about how a homeowner feels their property should draw more than the 32 homes they're competing against because of some minor value feature that most of the buying public doesn't really care all that much about.
The summary of where we are is this: You CAN make a great buy right now but to get there you must be prepared to price your current property at a true value to sell and move forward. We'd all like to buy low and sell high but only Warren Buffet seems to manage that. Last time I checked, he wasn't buying much property in our area.
A brief moment of levity.....
A client bought a new home and the broker wanted to send flowers for the occasion.They arrived at the home and the owner read the card; it said "Rest in Peace". The owner was angry and called the florist to complain. After he had told the florist of the obvious mistake and how angry he was, the florist said. "Sir, I'm really sorry for the mistake, but rather than getting angry you should imagine this: somewhere there is a funeral taking place today, and they have flowers with a note saying, "Congratulations on your new home".
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