In answer to the article header, the answer is right now. May 3, 2012, the exact moment in which I write this, rock bottom just happened. Here are the reasons.
#1) Arguably the most important reason, or the least important – because with a positive attitude come positive things. By letting the world know that this is the end of the bottom, it is. Simple as that. Now for those who don’t follow, let’s get to next reason – some of the statistically sound reasons.
#2) In areas such as Phoenix, where it seemed the end was not going to be in sight – it is in sight. Home prices increased by 8% in one month alone. This is in an area where over 50% of home listings were foreclosures, and it almost seemed that the city was going to be vacant if this continued for a few more years. Now people are buying up properties by either taking advantage of the opportunity to invest or by purchasing homes for themselves.
#3) Home prices are now on the same track as inflation. Just a few years ago, home prices inflated much more quickly than the national rate of inflation. This was what was called “the bubble,” it was false inflation of home values. Once that popped, home values have been rapidly declining, and inflation has finally caught back up to where home values should be. That’s right home values are finally where they should be. This means that consumer confidence in purchasing will pick back up, and homes will now be purchased at their current asking prices.
Because this is the bottom of the real estate bust, does that mean people are going to go bananas in purchasing homes? They should. Home prices are going to go up, and interest also have nowhere to go but up. But people won’t go bananas, damaged credit has impaired the buying ability of much of America, so hopefully over the next seven years as individual credit gradually restores, we will see a steady climb of the real estate industry – as long as it is on course with the rate of inflation, we are seeing an America which is gaining a steady and strong pulse once again.
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In 1989 I went as a four year old to Disney Land with my family, and Space Mountain had just opened – it was a ride from what felt like the future (ask my siblings… because I honestly can’t recall it). Chicago, Phil Collins, and Madonna were all that played on the radio. Ghostbusters 2, The Little Mermaid, Honey I Shrunk the Kids and Back to the Future 2 were the Blockbusters of the year.
It was during this time of my life that I learned a great lesson – if I picked up all of the loose change from the ground, I could become wealthy quickly. What could I do with this wealth? For every twenty five cents I gathered I could purchase two fruit pies, or a pack of six donuts Hostess powdered donuts. That was the good life.
Today, that same pack of Hostess Donuts is over a dollar. A loaf of bread is nearly four times as expensive, gasoline is also four times as expensive, cars are over twice as expensive, and so on, and so on. As we can see, inflation has left most goods at about two to four times higher on most goods. Let’s average it out, and say the cost of living is about three times more for basic goods today, than it was just 13 years ago.
Let’s talk about huge purchases. In 1989, the median cost of a home was $110,750 dollars. In 2011, the median cost of a home was $223,300 dollars (2012 data is not available… because 2012 is not finished). This means the face value of a home has increased just barely over twice as much today. The inflation rate of homes is well below most products which we consume (except for, of course, if we went back to 2007).
In 1989, mortgage interest rates were 10%. Source: See 1989 rates here. In 2012, they are at 4%. Let me crunch these numbers with a mortgage calculator.
Crunching…. Crunching… Alright, here we go:
Click Image to Enlarge
Now I’m not a realtor, but I’d suggest to go buy a home – today. If you need help with a good website to help you find a home, call me up. I’ve made dozens of them which nearly ten of thousand of people use daily.
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I’ve been checking out a ton of real estate around the country because of my job, and I love the United States of America! There are beautiful places from coast to coast. Northern California is a gorgeous area with rolling hills, large lots and beautiful vineyards. Charleston South Carolina is also beautiful with its magical historic feel.
But when it all comes down to it, there is no place like home. Home is Logan, Utah. Here I can experience four beautifully diverse seasons each year. I get the beauty of the mountains, the joy of large open fields, and I have both fantastic summer and winter entertainment. The people here are easy to become life close friends with, and the activities are endless. So if I ever end up settling outside of Logan Utah, you can bet that one day I will be back searching Homes For Sale Logan Utah.
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According to Inman.com, Sandicor (the MLS for Southern California, San Diego) requires that the listing agent contact information is placed on websites.
The MLS will reportedly terminate its data feed to those third-party publishers that do not comply in displaying the new field within 60 days.
My reaction: WTH? Srsly!?
In all possible situations I can not understand why the MLS would require it. To reasonably look at this, let’s first consider what an MLS is.
The MLS is a database of every home for sale, by realtors, within a specific area. This service makes an accessible database to developers and vendors to show listings on the world wide web so for the general public, finding a home is easy. Individual realtors take advantage of the MLS service so they can create a useful website for potential home buyers. Home buyers then come to a website which has the MLS and browse home listings – this information is free and available to them, but the developer of that site hopes that in return this “web surfer/ potential home buyer” will contact the designer (probably a realtor) to talk more about homes.
Now let me ask. Why would you build a website if 1) You know that when somebody views your website you are sending them to somebody else. 2) Even though you made it possible for this potential home buyer to find the home they love, you will never contact that person because you were required to put somebody elses information on it.
Should we not reward the person who took the time to create this resource (the website) available to home buyers.
A home is not the realtors product. They should have no right to put their name on it. The realtor did their job when they became friends with the home seller and then listed the home into the MLS. Beyond that, they should have no claim on the selling of the home, or give themselves an extra advantage in securing the home sale.
I’d like to try not to take side on things here, but this seems absolutely ridiculous. And I’m in Utah! It seems to me that this came about because a bunch of listing agents lobbied together to persuade Sandicor to make this nonsense decision.
Put it back to the way it was. There is no reason that a listing agent should need to double side every sale. They fulfilled their portion by listing the home, they can let somebody else do their job of now selling the home. Which brings up an entirely additional list of concerns when you suggest that the listing and seller agent be the same person. Sandicor, this decision is absolutely ridiculous.
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When you are looking to buy a home, you want the best possible deal. Who wants to pay more than they have to? When doing that, it’s important to know which type of seller you are dealing with. Is this a Non-Motivated Seller or is this a Motivated Seller?
Most sellers are motivated. Many sellers are in this boat: They owe more on their house than what it is worth, so unless they continue to make payments on it for the next 7 years they will continue to lose equity. Interest rates may have been very high when they purchased, so unless they’ve refinanced they want to go get into a home where they are not paying a hefty mortgage.
How you can tell if the seller is motivated.
The pluses and minuses of a motivated seller. Motivated sellers are generally great things for buyers. In most cases a motivated seller will pay all of your closing costs for you, and they may even drop the price more. Make sure you consider that when writing up your offer. The motivated seller may leave things (furniture, fridge) behind which will entice you to buy. One downside of a motivated seller may be the condition of the home, and
If you come across an unmotivated seller, you may want to move on from this property. Chances are that you will pay to much for the home and that you may end up being very unsatisfied with your purchase, as deadlines may not be met and the purchase will be long and drawn out. Unmotivated sellers are placing their home on the market with the hopes that some naive buyer will be enticed to their home and pay a price which is far above what the buyer should actually pay.
How you can tell if the seller is unmotivated.
The pros and cons of unmotivated sellers.
Here there are very few pros. The one big one that stands out is that it will make you question your desire to purchase this property, and you may move on and find an even better deal. Unmotivated sellers are unwilling to negotiate.
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Let’s say you’ve done your house shopping, and you’ve found the perfect home for you. The previous owners have moved out, gone off to another city or state, and they’ve filled the vacant house with a renter until their home sales.
When you are negotiating you need to figure out the advantages which both sides of the table have. First, let’s consider what negotiating power the home owner has.
They have the home you want to live in. This is your dream home. Once you make an offer, they know that you most likely wanting this home.
They have renters who are paying their mortgage off right now. While the home owners which you are trying to buy this house from may have may huge debt from this home, they’re getting money into the bank or building equity on a monthly basis. These renters may make the seller reluctant to sale. The question the seller must ask is if they want a ton of cash now, or if they want the long term investment.
You are going to buy their home. After months of waiting for an offer on the home, the seller finally has received one. If they don’t take this now, how many more months is it going to be until one is made?
This is a Buyers Market. If they don’t accept your offer, you are going to walk down the street and make an offer on the neighbors home.
Have a backup plan!!! This is vital to your negotiating power. Even though you will not communicate directly with the seller, and your realtor won’t, you need to have your realtor communicate to their realtor that you have a backup plan.
The best backup plan is to have another offer on a different home that you can walk to right now. In Business School they call this a BATNA (Best Alternative To a Negotiated Agreement). This is where you can say “Oh, you won’t accept this… well, Jim down the road will accept these such and such terms…”
To acquire a BATNA, you need to offer on a different home first. You need to low ball on an alternative home that you would be very happy with, but low ball so much so that offer will not be accepted (but if does, then great – or lose your earnest money if you weren’t actually sincere in your buying intent…). At the point that your offer is not accepted by your alternative home, you will have more than likely a generous counter offer. That offer is everything, use that as your leverage.
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My name is Kirk Salisbury, and welcome to my website kirksalisbury.com. I live in beautiful Logan, UT
and work as a web designer
SEO specialist and
internet marketer
at Boomerang Leads.