Want to make the best home purchase in the last 20 years? Get ready.
In part 3 of Here's Your Sign, we're going to step way out on the ledge to talk about the future. In ordinary times, for whatever those even are anymore, we could look at all kinds of empirical data and have a fairly good feel for value and trends. Not in the last 18 months.....not even close. Any realtor or pedestrian who thought they did was either foolish or lying because it's been that tough. We are, however, the most affordable city in America by many accounts including a new list out now in BUSINESSWEEK.
It's my belief that in 2009, we may begin to see that change. What I will not predict is that values will rise, the markets will normalize, the seas will part and all will be right with the world. The one thing that seems to be aligning is a change (every one's favorite word these days) in the direction of the overall market in the next 12 months.
As we discussed in parts one and two of our market analysis, the actual market trends consistently follow roughly 9-12 months behind the top home builders stock prices. During mid July (by most stock charts on or about 7/14/2008), those national builder stocks all switched direction and began trending up. If history repeats as we believe it will, then the summer of 2009 will be the turning point for our home market.
I want to reemphasize several points here. This does NOT mean there's going to be a dramatic turnaround in value. All it means is that we may see the overall trend change from what it's been over the last 30 months. Translating this for home BUYERS, once the trend changes, the psychology of home sellers will change and be much less agreeable to significant negotiation as they should be today. Prospective buyers have been saying for months that 'we want to buy at the bottom.' Well guess what.....we're there. Once the first three people figure out the market is truly going to turn, it's too late, buyers. If you want to take advantage of the most significant downturn in the last several decades, make your purchase before any sign of warm weather hits next year. You want the bottom? It's about to hit us in the head. Be ready and have your checkbook out. Once the reality of change occurs, there will be a stampede from all of this pent up demand. When that happens, you'll want to be the one standing on the sidelines with your shiny new below market home purchase rather than those attempting to get in the game with sellers not so ready to play 'let's make a deal.'
Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG (4734)