What's Causing This Slump?

What's Causing This Slump?

 

It's no secret that real estate is experiencing a market slump; in fact sales are lower than they've been in 16 years.  Wall Street economists compile a seasonal market forecast; a rating higher than 50 indicate a positive market.  The current forecast was only 30 and has remained below 50 since may of 2006.  Gone are the golden years of bidding wars or listings at unrealistically high prices.  For the seller, it's time to come back to reality and do whatever it takes to sell your home.  For the Reno home buyer, your time has arrived!

 

With new homes creating about 15 percent of all home sales, there is a glut of inventory in the homebuilder industry.  What do stores do when they have extra stock; they have a clearance sale!  As a result the market is saturated with buyer incentives offered by over 70 percent of U.S. builders trying to unload their homes.

 

Some prospective home buyers may purchase before they are ready.  On the flip side, some may hold back because they feel overwhelmed.  Currently the federal government has been investigating the legalities of all these "buyer incentives" that are being promoted in the real estate industry.  Although no final reports are available, there are some basic considerations to keep in mind.

 

Make certain the cost of any incentive is not built into the price of the home, as it must be a legitimate perk.

 

If the promotion involves financing, the buyer cannot be coerced into dealing with the builder's financial associate or a particular lender as a prerequisite to the sale.

 

If the incentives exceed 6% of the purchase price, be cautious; generally even high risk home buyers are required to put at least 10% down.

 

And lastly, if it sounds too good to be true, it probably is.

 

There's no question that now is the best time to buy a home that we've seen in a very long time.  Talk to us if you're even THINKING about buying a home right now.  We'll be happy to discuss the options and great buys on the market right now.