November 2008-sans stats

I have one thing to say, BUY, BUY, BUY. If ever there was a time to get off of the fence it is now. I encourage all of you to BUY, and your friends to buy. As of today we are below 2004 values, year-to-date, with the exception of area 171 (southwest suburban) and that area is trending down as well.

The foreclosed market is finite, one TRILLION dollars is going to make a difference in this market and now is the time to buy. Over this weekend JP Morgan (read Washington Mutual) has acknowledged that the company needs to re think the foreclosure process and even go beyond to look at homeowners that are in good standing today but may become distressed sellers tomorrow. Other lenders are beginning to show signs of similar thinking.

Are the prices going to descend lower? Here is food for thought:
Double Diamond/Damonte Ranch, one of the hot beds for distressed sales, data is for homes under $300,000 sold in 2008 by quarters:

1st quarter sales: 21 homes sold for an average of $267,258
2nd quarter sales: 37 homes sold for an average of $263,010
3rd quarter sales: 47 homes sold for an average of $262,347

That is a change in values of only 2% over 10 months. The average home in escrow today is $265,627. I have to ask you is this the picture of a bottomless market?

With a trillion dollars and banks possibly rethinking how they foreclose, we are in a great position to see inventory drop and choices dry up. I am not suggesting a price bounce of any measure now, or any time soon. What I do see is that the deals of today will disappear much sooner than buyers realize.

Where are the good buys? Just about anywhere you look and for whatever your budget is. I do not see any price recovery for homes valued after late 2003 through mid-2007 for several years or more. The real road to recovery will be for the sellers that sell today and buy back into these much reduced values and ride the recovery from the bottom up. Holding on is going to be expensive for those that really want to sell and are trying to “hold out” for the market to “go up.”

Oh, one last thought, I have purposely written this on November the 3rd. Whatever happens tomorrow, regardless of your feelings, a major milestone will be behind us and we will all have the same opportunity to move forward for the better and look up. I for one plan on moving forward and I expect to find willing and capable buyers for every one of my clients and for my buyers, to find them a home that they can be proud of for many years to come.