Don't Miss the Boat!

Housing Market Conditions Favor Homebuyers

Home price affordability has improved dramatically in many U.S. cities … 53.8% of all new and existing homes sold nationwide during the first three months of 2008 were affordable to families earning the median household income of $61,500, according to the latest Housing Opportunity Index released Tuesday by Wells Fargo and the National Association of Home Builders (NAHB).

“Three factors combined to substantially increase housing affordability: mortgage rates returning to near the record low levels of a few years ago, a $2,500 rise in family income nationwide (from 2007 to 2008) and lower house prices.”

-- Sandy Dunn, NAHB president, “Homes are Biggest Bargain since 2004,” by Les Christie, CNNMoney.com, May 21, 2008.

"If you were thinking of buying a home, start looking. The latest data from the housing market shows that sellers, after months and years in denial, are finally giving in to reality and slashing prices. There is a distance still to go. There may even be a lot to go. But the process, long delayed, is now well underway."

-- “Home Buyers, Start Your Engines,” by Brett Arends, The Wall Street Journal (subscription required), May 17, 2008.

“There are many reasons for people to get into the housing market today, and very few reasons not to. With the plentiful supply of homes for sale at affordable prices, interest rates approaching 40-year lows, and the strong track record of housing as a good long-term investment, conditions are ripe for buyers. Those are the facts, plain and simple.”

-- Lawrence Yun, chief economist, National Association of Realtors®, “Home Sales, Prices to Pick Up in Second Half of 2008, Says NAR Chief Economist,” Yahoo News, May 15, 2008.

Consumers Shouldn't Wait to Buy

“I’m concerned that consumers in many markets in America are putting off buying a home because they see some of the national statistics and they forget that real estate is local.”

-- Jim Gillespie, president and CEO, Coldwell Banker, “Housing’s Rosy Outlook,” CNNMoney.com (video), May 19, 2008.

“This is the absolute best time in my 33 years in real estate to buy a home. Interest rates are still low, inventory levels are high, and prices are stable. You should not try to time the market. People who try to time the market get burned.”

-- Jim Gillespie, “Housing Slump can be a Boon to Buyers,” by Dennis Larison, Lancaster Online, May 18, 2008.

(Reported by Pam Smith, Coldwell Banker Seaside Realty Sales Manager)

Are You Pre-qualified?

One of my good friends has recently been thinking about buying her first home. Now that we are in a great buyer's market with incredible opportunities, it is the perfect time to purchase a home you may not otherwise be able to afford. So she started looking at what was available for sale and found some homes she was really interested in. I started to see her excitement and was equally excited to help her with her first home purchase, but we had not taken one of the most important steps yet. I recommended that she talk with a local lender to see what she would qualify for before falling in love with a home. After learning that it costs nothing to get pre-qualified, she met with a local lender and found out she ALMOST qualified to purchase a home. Her credit score was in the right position, her debt to income was fine, but the only thing she didn't think about was the fact that she would need down payment money. So we decided it was in her best interest to start saving and take another look in 6 months when she would have more liquid assets to put towards the sale. Being a first time homebuyer, she was amazed with the process and was excited to learn about her debt to income, credit score, liabilities, assets, etc.

The best part of the process was that she realized the importance of getting pre-qualified before looking at properties. It allows you to understand your buying power so that you don't waste time looking at properties you cannot afford or miss out on properties you didn't know you could afford. If you find yourself ALMOST qualifying like my friend, your lender can help you determine what you need to do to help your credit and financial position to qualify in the near future. The process only takes a few minutes and the best part is that if you do qualify, your lender can instantly provide you with a pre-qualification letter that you and your Realtor can present with any offers making the seller aware you are a serious buyer.

Moral of the story: get pre-qualified first and foremost to know your buying power!