Is it finally time to dive into the housing market in Bucks County?

I have a number of people who have been following the local real estate market for many months, and in some cases, more than a year.  I watch as these folks search my website for listings, and we  have actually looked at homes, from time to time, in some cases. According to an article in the Wall Street Journal, yesterday, some people are finally deciding that the time is right to take advantage of the glut of inventory of houses to choose from, as well as low interest rates, and are taking the plunge.

As the article points out, the housing bust, appears to be creating a new group of winners; first time home buyers.  People who watched as friends rushed to buy homes several years ago, are now in a position to take advantage of what look like, incredible deals.  According to the National Association of Realtors, first time home buyers made up 41% of all buyers at the end of 2008, up from 36% in 2006. 

First time home buyers are in a great position.  They are lured by home prices that are obviously depressed.  In some markets, prices have fallen by as much as 40% from peak levels.  Fortunately, in Bucks County, prices have not fallen as significantly, but they are definitely lower.  Houses are clearly more affordable.

In addition, mortgage rates are near historic low levels. 

On top of low prices, and low mortgage rates, it appears as though there is going to be a great tax break specifically for first time home buyers, in the financial rescue plan.  As the plan is currently presented, first time home buyers may be eligible for an 8,000 tax credit, if they buy in 2009. 

First time home buyers are in a great negotiating position when making offers.  Having nothing to sell, makes them extremely strong buyers.  Often sellers are willing to accept lower prices, knowing that a first time home buyer, with strong credit, is presenting offers that are clean, meaning that there is no worry about the sale of another house. 

Because of the amount of inventory, buyers can be patient and selective.  Although we won't know where the bottom of the market is, until it is too late, it appears to be an ideal time for first time home buyers, to get into the real estate market.

Yardley Bucks County Real Estate Update

For those who read my blog, I have to apologize for not being very diligent about posting, recently.  Believe it or not, I have actually been pretty busy practicing real estate.  I thought it would be interesting, to offer a brief review of some of the transaction challenges, along with some successes we have seen, of late.  This may help to provide a more accurate indication of what is really happening in the Bucks County/Mercer County, and surrounding areas.

With regards to my listings, I am fortunate in that I am marketing homes in a very diversified price range, from the 200,000 range to well in the millions.  In my opinion, the higher priced market has been impacted more significantly than more modestly priced homes.  An indication of this, is that in Upper Makefield Township, it would actually take years to sell all the houses that are currently on the market, priced over 1 million dollars, based on the current rate of sales.  I recently listed a house priced at 294,900, and we negotiated an offer within the first 2 weeks that the house was on the market. 

I recently listed another property in New Jersey, and we got an offer within the first 4 days of putting the house on the market.  We are still waiting to see whether this will work out. 

If you are wondering what I attribute the fast turnaround to, with regards to both of these recent listings, it is that the homes showed incredibly well, and were priced to reflect current market conditions.  I think that is the single biggest obstacle that we face right now.  I believe that many sellers still are not realistic enough about what happening in the market.  If a house is not priced appropriately, there is no doubt that it will sit on the market for a long time.  There is a lot of inventory competing for the attention of buyers, and there are not enough qualified buyers to absorb all of the inventory.  On top of that, in many areas we are seeing more short sales and bank owned properties than at any time since I have been in real estate. 

I recently had a buyer make an offer on a short sale, and it can be a long and arduous process, since the ability to close the transaction is entirely dependent on the lender accepting the offer.  Depending on the lender, that process can take weeks, or longer. 

Another transaction that I am currently working on, brings up another potential challenge.  I am working with a buyer who made an offer on a property that was absolutely gorgeous.  Totally upgraded, move in condition, and priced at what we thought was a very realistic value.  We wrote an offer, negotiated the price, and thought the process would be quick and easy.  That is until the appraisal came in below the contract price.  Basically that means that the buyer would not be able to get the loan as per the mortgage contingency on the contract.  Somewhat in response to the mortgage crisis, appraisers are now being extremely conservative, so this is not an unusual problem.  Based on the appraisal, we had to re-negotiate the price, and were able to work out a combination of a lower price, and some additional buyer funds to ensure that the house will go to closing.  It was just not an easy process.

I could go on and on with a variety of stories about what is happening in our market.  Prices are challenging for sellers to deal with, but there are houses selling every day.  If you are a seller, be realistic, make sure your house shows as well as it possibly can, and be pro-active in responding to the market.  I have a book that I can email, called, "450 ways to get your house sold quickly".  If you are thinking about selling, I highly recommend reading through this booklet, it offers great advice about getting a house ready to show. 

For buyers, you can be selective, and there are great opportunities in the market.  Interest rates are at all time, historic lows.  Have we reached the bottom of the market?  Only time will tell, but I do know that by the time we know for sure whether we have reached the bottom, it will be too late.