To Buy, Or Not To Buy (with apologies to WM. Shakespeare)

With the nation’s housing market behaving most untraditionally over the past few years, many would-be buyers are understandably scratching their heads, wondering if the right time to buy is now.

From strictly a local market perspective, the answer to this frequently-asked question is an enthusiastic—if qualified—“yes.”  Having been among the first regions in the nation to experience the full brunt of the housing bubble—and its all-too-familiar aftermath—Southwest Florida is now ahead of the curve with respect to its recovery.  More than two years of aggressive price reductions have recently restored some semblance of local stability to our market; while nationally, sales took an unexpected dip this winter—largely attributed to weather that prevented buyers from leaving their current homes to shop for new ones.

In Sarasota, Manatee and Charlotte Counties, on the other hand, the weather stopped no buyers from making their appointed rounds.  Unit sales are up, pending sales are up dramatically, inventories have been reduced, and our market’s median price, no longer in freefall, is bobbing up and down marginally from month to month—traditionally a symptom of firming-up prices.

Thus, all indicators of a sustained recovery are evident throughout the region as we wrap up the first quarter of 2010.  Add two seriously attractive purchasing incentives to the mix—the first time home buyer tax credit and historically low interest rates—and you’ll understand why so many people feel it’s now or never if buying at rock bottom prices is priority one.

Now or never, because buyers have barely five weeks to go before the deadline passes for the first time home buyer’s tax credit—something of a misnomer since “first time buyer” is defined for purposes of eligibility as someone who has not owned a primary residence during the three years leading up to the purchase date.  To close by the final June 30th cut-off date, buyers must have a contract signed and executed by April 30th.   Moreover, the government has sent strong and unambiguous signals that there will be no further extensions of the deadline.  (To learn more about how you may qualify for the expanded tax credit, visit Realtor.org.)

Now or never, because such unusually low interest rates basically have only one direction in which to go—up.  On March 30th the Federal Reserve exited the market for mortgage backed securities, giving them less motivation to hold the line on today’s rates. To attract new buyers for these securities will likely require higher yields, which translate into higher mortgage rates at some point in the not-too-distant future.

Unlike the ubiquitous flippers from the boom, most of today’s buyers are in the market for more traditional reasons. They leave the parental home, get married, cohabit, start families, get divorced, or relocate to other markets.  They downsize when the nest is empty; and upsize when it overflows.  If any of these reasons apply to your situation—or if you simply want to use today’s extraordinary buying power to affect a much wanted change in housing—then yes, now is absolutely the right time to buy.  The market will ultimately validate your decision.

Conversely, if you don’t need (or want) a new home, does this perfect storm of favorable conditions still make now a great time to buy?  Probably not.  The best time to buy is when it’s right for you.

You’ve no doubt heard people groan in retrospect that they “shoulda” bought that house down the block when it was worth much less and could have been had for much less; but no one has crystal ball clarity when it comes to anticipating such outcomes. What we do know, however, is that unlike most big-ticket durables—automobiles come immediately to mind—homes tend to grow substantially in value over time.  The extreme circumstances of today’s market notwithstanding, home prices in the U.S. have traditionally risen three to six percent a year for the past 20 years. (Closer to six percent in Southwest Florida.)

That 2010 will undoubtedly go down in the record books as one of the best years ever for buying properties in Southwest Florida in no way negates the fact that the market remains tricky to understand and even trickier to navigate.  If anything, the very force that makes now the absolute best time to buy a home—a bloated inventory top heavy with bargain-priced foreclosures and short sales—is poorly understood, at best; requiring agents to master important new skill sets.

Even in the best of times, most buyers would never dream of making one of life’s most important purchases without the guidance and expertise needed to make prudent, timely and intelligent decisions.  Whenever you decide is the best time for you to buy, make sure you work with an agent who has an up-to-date knowledge of the market and its present-day dynamics, understands your needs and reasons for buying; and knows how to put the two together.

To buy or not to buy?  That is the question.   Deep down, only you know the answer; but when the answer becomes “yes” let the team from Michael Saunders & Company make your purchase of a home in Southwest Florida the best-timed decision you’ve ever made.

  • User Gravatar Tampa Homes
    March 30th, 2010

    You are absolutely right! Although the incentive is high for new buyers, no one should make a decision of this magnitude without really weighing every pro and con of buying in April regardless of the incentives.

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