If you are looking to buy a home now you need to be more particular than ever before. Real estate prices are still in decline and these up down cycles can typically last ten years or more. To protect yourself against ill winds there are some things that should look for when buying in difficult markets.
2. Supply Demand: If you can choose an area close to the city center, where new development is limited that is a plus. Be on the lookout for areas that will be offering large developments. You might want to check in with the local planning commission to see whats on the drawing board.
3. City or Suburb: Out lying areas are having more difficulty selling and maintaining value. Consider the cost of travel in gas and time. people are returning to cities.
4. Foreclosures: keep away from areas with a lot of foreclosure signs. they will pull down the price as banks low ball prices to offload inventory.
5. Micro Location: be much more particular in difficult markets. Choose your street carefully. Look for the sunny side and to be away from traffic or busy shopping areas. In good times people will pay higher prices for poor locations, but will not be so ready to do that now.
6. Job Market: Prices are sustainable when people believe they will have the ability to pay. Check the local papers or crags list to see if the job market is healthy in your area.
7. Willing Sellers: Now that the cost of money is still rising and lenders standards are tightening, a seller willing to carry becomes very important. often, the terms are more favorable.
Real estate cycles tend to be long and in weak markets it pays to have as much working for you as possible.
We have strong job growth, thanks to the Bio Tech industry and to tech in general. The reverse commutes that Ebay, Genentech, Apple and Google have placed strong demand on housing in a city that has limited supply of housing and land to expand on. Our height limitations arent helping either. The result is high rents that are providing bigger cash flows and higher property values.
Although the foreclosure rate is at 102% higher than last year, we are still looking at a small number, only 257 homes. Still one wonders how this market can escape a long term downturn. Its almost a perfect storm for declining prices.
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