How to tell if you’re being priced out of the market

You’ve been sitting on the fence about buying a home. You’ve been looking and looking but nothing really strikes your fancy. There’s a good reason for that! You’re being priced out of the market. And it’s only going to get worse from here.

Your Price Range is Getting Tight

You don’t see it coming – it happens that slowly – but one day you wake up and decide that now is not the time for you to buy a home. You just got priced out of the market.

It’s a shame, too: There are so many good homes just begging to be bought but you keep waiting for new inventory. And it never comes. That’s because new inventory is being priced more aggressively with each passing day. The new, GOOD stuff is not hitting your universe and you don’t know it because you’re “looking for homes between X and Y.”

Here’s the scenario: You buy your home based on your monthly payment. You HAVE to. It’s an economic reality. So, you set your Internet search criteria for homes in your price range. You can’t move higher than that because you can’t afford it. It’s normal. Only Bill Gates and Warren Buffet have the luxury of buying any darned thing they want. The rest of us have to live with the universe of homes in our search criteria’s price range. That’s YOUR universe. Read Fantastic Inventory.

The Mortgage Calculator Brings Bad News

You start to notice that the new stuff that hits your radar isn’t quite what you were looking for. Each day, you get more frustrated. You start playing with numbers with the mortgage calculator to see if you can afford more. You check the interest rates and notice that they’re ticking up. When you plug the new number in, your dreams are dashed!

The next shoe to drop is the disappearing tax credit. Current homeowners are eligible for $6,500 bucks, first-timers could score $8,000 grand. You have to sign a purchase and sale agreement by April 30 and close on the deal by June 30. Short sales and bank-owned properties disappear from the radar since they probably won’t close in time. After April 30, everything gets $6,500-$8,000 more expensive.

The numbers start looking worse for you. How about tax rates? Someone has to pay for free health care, “cash for clunkers,” tax credits for homebuyers, and all that other stimulus. You’ll see that person in the mirror. Property assessments start to rise, tax rates are hiked. The new reality that comes from the mortgage calculator is not pretty when you plug in higher taxes.

Jobs: Good News, Bad News

The good news on the jobs front is that jobs are coming back. Hooray! The bad news for homebuyers is that jobs are coming back. Boooooo… More people with more money in their pockets means increased competition. More demand means higher home prices.

Not too many folks are worried about mass layoffs anymore. Indeed, the latest reports from the National Association of Realtors and MLS Property Information Network, the local Multiple Listing Service, is that Essex and Middlesex counties have fallen into Seller’s Market territory. The main driver of this new phenomenon is jobs.

The most recent report is the 4th Quarter 2009 Economic and Market Watch. It shows that on a scale from 1 to 5, with 5 being a full-blown Seller’s Market, Essex and Middlesex counties are at a 4. The prior two quarters were at a neutral 3. You can see all these reports on the MLS Web site.

What’s Past is Prologue

Shakespeare said it best, “What’s past is prologue.” The fourth quarter of 2009 is old news. You and your Realtor^® are making fresh news TODAY. Don’t let the headline read, “Seller’s Market Leaves Would-Be Buyers in the Cold.”

How to Save Yourself

Folks on the fence about buying a home are spending WAY too much time in front of a computer screen and not enough time inside of houses. The Internet is a sword that cuts two ways: It makes searching for homes so much easier but it also feeds your indecision. You’re overloaded with information but the information you’re getting is not helping you make a decision.

Pretty pictures on the Internet don’t tell you anything about the layout of a house. The pretty pictures are silent on the location or neighborhood. If you’re SERIOUS about buying a home, you absolutely MUST work with a Realtor^® who can help you line up financing, set up private viewings on YOUR schedule, and coordinate the closing and final move into your new home.

A Realtor^® will help you decide what’s best for you and your family. The Internet will show you pretty pictures of a Seller’s Market while you get priced out of the market.

Filed under Buyers, Economy, Uncategorized   Tags: Inventory, Jobs, Pricing

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