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Don't Miss The Opportunity of A Lifetime!
What Today's Buyer's Market Means To You...

by Victoria St. John, CEO/Publisher, New Homes Magazine

What's the real story? With all the negativity in the media about the housing market, it's not surprising that many buyers are taking a wait and see approach. I don't blame them for being hesitant considering all the gloom and doom reported by the media on a daily basis. Is it really a terrible time to buy? Actually, it's a GREAT time to buy a new home. We are in the midst of a buyer's market where everything has come together to offer buyers the opportunity of a lifetime.

Why buying now makes sense...

Three key factors make today's market one of the best ever for buyers. For starters, in many regions home prices have softened from the height of the buying frenzy we saw in 2005 and 2006. Suddenly, homes are more affordable in many Northern California cities.

Another part of the equation is builder inventory. Many builders currently have move-in ready homes and they are eager to work with qualified buyers to customize a deal. Builders are offering exciting incentives and most would prefer to extend a deal to a buyer rather than continue paying interest on the property.

Finally, today's favorable interest rates play a significant role in the current buyer-friendly market. At press time, 30-year fixed rate conventional loans were averaging around 6%, down from just a few months back and extremely attractive when viewed historically.

What about all those media reports?

Keep in mind that most of what the media reports focuses on sales figures. We are constantly hearing that sales are way down, followed by rankings of the “worst” real estate markets in the nation. What these reports fail to mention is viewing sales data historically, 2007 was not such a bad year. In fact, according to National Association of Realtors® Chief Economist Lawrence Yun, “2007 will be the fifth best year for housing on record.” How can this be? The reality is we are coming off an extended real estate boom that shattered sales records, saw unprecedented price gains, and in Yun's words, “created unrealistic expectations that housing is a short-term high-yield investment.”

When people saw prices rising dramatically in such a short period of time they wanted to get in on the action. Creative financing programs expanded the pool of buyers and competition for a limited supply of homes quickly drove prices up. In a five-year period many homeowners saw their home values increase by 100% or more. Of course, the market couldn't sustain this pace and buyers were quickly priced out of the market. Builders who geared up to meet the increased demand were suddenly sitting on inventory and the market began to shift. This is why some areas have seen double-digit price declines in the past couple of years, while other regions with limited new construction, like Santa Clara County, San Francisco, Marin County and parts of Contra Costa, actually saw median home prices increase modestly between September 2006 and September 2007.

Are we really at the bottom?

It appears that home prices are stabilizing and buyers are gaining confidence. Builders are seeing traffic pick up at their new communities and those in the know are calling this the opportunity of a lifetime, especially for first time buyers. At the National Association of Realtors® Conference and Expo in November, Chief Economist Yun predicted a recovery for existing home sales in 2008. That's good news for builders and home sellers, but it means buyers have a limited window of opportunity to take advantage of low prices and great deals. As existing builder inventory is absorbed we'll see fewer incentives and diminished negotiating power for buyers.

Will real estate remain a solid investment?

Historically, real estate—especially in Northern California—has been a solid, long term investment. Certainly there are peaks and valleys in the market, but those who've managed to ride out the “storms” have enjoyed incredible gains in home values. According to the California Association of Realtors®, the median price of a single family home in California in 1990 was $194,952. Today, the price for that same single family home is $588,970, that's a 202% increase!

In addition to long term financial gains, buying a home represents an investment in quality of life. Your home is your private sanctuary from the world, it's a source of pride, an extension of who you are, and a place to create cherished memories. The key to a successful home purchase is buying the right home at the right price with the right loan program. If you are buying as an investment in your future, with the idea that you will live in your new home for years to come, you can't go wrong—your life will be richer and you will enjoy the opportunity to build wealth over the long term.

So, what are you waiting for? You are faced with what could be the opportunity of a lifetime. Take advantage of today's incredible buyer's market and grab your shot at the American dream.




Prices and terms in the home listings and featured articles on New Homes Online are subject to change
due to the time element between receipt of material and date of publication.

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