Arrowhead Lakes: Market update August 2010

I am constantly asked questions about the market and how things look for homeowners and homebuyers. If you watch the news or read articles about real estate, you can get completely bombarded with information that seems to be contradictory. There are so many ways to approach questions of economics in this volatile economy. Let's take a look at some of the common questions I hear day to day.

How bad is the market?

This question is one I get all the time. The answer most definitely depends on the person asking the question. For example, if you are a homeowner that purchased at the top of the market, you might think it is pretty bad. Prices are approximately half of the peak prices we were so proud of just 4-5 years ago. So as a potential seller, the situation might be pretty bad. However, if you purchased before the historic run up in home values or in the last year, you could be sitting with equity even today.

Buyers on the other hand should be outright bragging as to how good this market is today. The prices have been stable in our area for over a year, the interest rates have dropped to all-time lows and sellers have shown pretty good motivation to get a deal done.

How long will it take for housing to improve?

The way we need to look at the market is not as good or bad. It is almost always good for someone. A healthy market on the other hand is one that has predictability, regular turn over, and stability, in pricing. A healthy real estate market is one that allows buyers to buy with confidence and sellers to sell at a price that is close to the estimate of value based on recent real estate activity.  It is my opinion that we currently have a relatively healthy market based on the criteria I just mentioned. Most buyers are pretty certain that they are paying a good price today. Sellers may not be happy about the value of real estate, but at least the pricing has become stable and predictable. Additionally, our inventory of available homes, are sold at approximately the same pace as new listings hit the market. I actually believe that our sales rate would exceed the new listing rate if less of our listings were short sales. The short sale process artificially slows sales and demand by causing the process to linger and frustrate buyers and sellers alike.

What do I do if I can't afford my home anymore?

Every day I talk to someone about this situation. Unemployment and underemployment have certainly taken a toll on families financially. There are options for families that are experiencing a hardship. The first step I would advise someone to take is to talk to an attorney. I know that the expense of an attorney may seem steep when you are already struggling, but the expense of not being properly informed may be far greater. Once you know best and worst case scenarios, you may feel a sense of relief. I recommend that you not put this process off too long. The sooner you know your options, the more likely you are to make the best decisions.

If you would like to discuss this article or something else you find interesting about Arrowhead Lakes, feel free to give us a call or send us an email. We look forward to seeing you in the neighborhood.

Your Neighborhood Real Estate Resource,

Jim and Anna Kuttner

The Kuttner Team, RE/MAX Professionals

Email us at jim.kuttner@remax.net or annakuttner@remax.net

Visit us at www.kuttnerteam.com