Are you ready for the flood of buyers??!!

Pent up, demand is ready to burst.  Across the country, nearly 4 million jobs have been added and wages have increased by 7 percent.  The Dow Jones is at the highest level in history and the aggregate national income is at $1.35 trillion.  Put that on top of the recently slowed market, and you cannot help but to expect a surge in the real estate market.  Buyers are bursting at the seams to buy a new home.  The mortgage market is realigning and ready to ease up on their most recent restrictions.  Once those hurdles are cleared, the buyers will be flooding the market.

In addition, the number of households is down by two-thirds  as of the first quarter, which indicates that people are holding back due to uncertainty about the future.  Those opinions are changing as they see more reports about a rebound and notice prices remaining stable.  As an appraiser, I have seen my business decline marginally over the past several months only to see it climb in the past two months.  That bucks usual trends that show the months of August and September are traditionally slower due to kids going back to school.  Families that would normally have moved during the summer months, wouldn’t because of uncertainty or couldn’t because of the mortgage realignment.  They are ready to go now.

As further proof of the mortgage market gaining strength, mortgage applications for home purchases have been rising nearly 10 percent since May.  This data, from the Mortgage Bankers Association, centers on “A” paper loans (good credit), so that increase indicates a rise in quality.  Quite a few mortgage companies shut down, while even more have lost money.  Those that remain have cut their losses and need to make more loans.  They are putting new programs to cater to a larger segment of the mortgage market.

Finally, the rate cuts.  The Fed is expected to cut the interest rates again by the early part of 2008.  That spells even more reason for buyers to come out of hiding.

Many of you have been concerned about buying investment properties.  Every bit of news that is being published gives more support to jumping in now while the fire is hot.  Considering that it will take a few months to acquire, rehab and remarket the property, now is the time to buy in time for the buyers to purchase your property.

Posted by Clayton October 2007

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