The year 2010 has been one of economic change and financial instability in many families. Much of the anxiety that people have felt has been due to the housing market. Families have lost homes, or have been fighting what seems to be a losing battle to try and keep them, for several years. We have heard politicians promising help, but most have been yet to see it in their own situations. Foreclosures are on the increase and families who have been home owners for years are now looking at rentals as their new lifestyle.
Although this may all seem like terrible news, that leads only to a total collapse of the housing market and the economy as a whole, this is not really the entire picture. What we are now facing is a time that is commonly called, in the real estate world, a buyer’s market. During a buyer’s market, there are more homes for sale (more sellers) than there are buyers for those homes. This gives buyers the advantage because they have the negotiating power to work with. If the sellers of the home that they want aren’t willing to work with them, there are plenty of other homes to choose from. This puts potential buyers in a stronger position than when we are in a seller’s market, where there are many buyers and few homes for sale.
The lending market and the appraisal situation has tightened up which has caused some buyers to be leary about even attempting to get the necessary loans and financing that they need in order to purchase a new home. However, this is not all bad news for buyers, either. The new banking regulations are actually making it so that people don’t end up getting approved for home loans that they aren’t really going to be able to afford after the first few payments. This is a very good thing, in light of the fact that this is the problem many families got into which led in part to the current situation. As for the appraisal situation, homes are not appraising as high as they once were. This is great for buyers, because it is a reality check for many sellers who may not be able to grasp that the home that they feel is worth a quarter million dollars is not really worth that today.
Over the years, the real estate market has seen many fluctuations. There have been ups and downs. There have been seller’s markets and there have been buyer’s markets. Sometimes, the changes have lasted only a short time, while others have went on for several years. The point is that there has never yet been a time when the market has changed and then never went back the opposite direction. The real estate market has seen changes and recoveries, and will almost certainly continue to do so.
The door today is open widely to buyers. It is a great time to invest in real estate. With negotiating power, lower appraisals, home values being lower than they have been in prior years, and lenders that are using logic and common sense to approve loans, buyers are able to enter the market with confidence and wisdom that they haven’t always had behind them. Aside from that, there are also many homes to choose from and buyers who are in need of selling, even at prices lower than what they may have initially wanted to get. Today’s home investors will likely be tomorrow’s sellers, who will realize a wonderful profit when the market once again fluctuates.