The Good Word for Sellers in this Market

Even given stagnant salaries, we have great affordability, pre-bubble prices, and low interest  rates. Given these factors, Buyers find the cost of home ownership a bargain. In other words, a great time to buy.

What kind of wisdom do we have for Sellers who bought at the top of the market and have watched falling home prices erode their equity until they can see a short sale a possibility (they owe more  on the loan than the home will bring in this market). With more foreclosures coming on the market to increase supply, cool prices and reduce demand ... what encouraging words do we have for Sellers?

Three encouraging things can be said: (1) consumer confidence strengths with decreasing unemployment  rates; (2) home appreciation is making a comeback; and (3) most importantly, if you sell your home and buy another you become that Buyer who buys at bargain rates and enjoys low monthly payments. You make up on the buy what you may lost on the sell.

Consumer Confidence Strengthens.  

Across the nation unemployment rates are dropping for all states, some more than others, but all showing some improvement in a bothersome unemployment statistic. People with good jobs are coming off the fence to home ownership as they have more confidence in their own employment future.

Homes Will Appreciate.

Historically, homes have always been a good investment (see the "return on investment" chart, attached) and home appreciation numbers will return to historic norms. MacroMarkets surveys over a hundred economists on a quarterly basis. The economists try to determine what the expectations are for home appreciation.  

The consensus with the hundred economists was that between 2012 and 2015 we are going to start seeing appreciation, not depreciation. At first it will be very limited.

In 2012, we’re going to have about 0.2 percent depreciation. Most of that’s going to come in the first half of the year. Prices are going to drop in the first half of the year and then pick up again.

The MacroMarket economists believe that we’re going to steadily climb back to the over 3 percent per year annual appreciation, which has been a historic norm, and that we’re going to catch that number in the next five years.

If you're needing to sell now, then do it quickly before the new wave of bank owned properties pump up the supply numbers and further depress home prices. If you can wait to sell, then take heart that the days of depreciating home values are ending.

If You Sell and then Buy You Reap the Benefits of the Buyer Friendly Market

You might sell at a price lower than what you bought your home for, but you can turn around and buy an equivalent or even larger home for bargain prices, at low interest rates, and at a monthly mortgage cost below what you're paying now.  What you may lose on the sale you more than make up for in the buy.

Conclusion

There's more good news for Buyers then Sellers in today's market. Sellers face tougher challenges. We're not here to tell you what you want to hear, but here to tell you what the facts and experts say you must hear.  Prices will drop further, so get on the market if you need to sell. At least unemployment eases and consumer confidence in buying your home strengthens. If you don't have to sell, hold on. The days of steady depreciation are coming to an end. 

Most importantly, if you do sell in this market - and turn around buy - you reap the benefits of today's Buyer ... sell cheap and buy cheap and balance off your losses.

Thanks for reading the blog.