Have We Hit the Bottom?

I still get that questions asked to me on a regular basis. In my opinion, we have already seen the bottom of the market, and the future outlook in the coming year would be based on individual neighborhoods. Some may stay somewhat flat as far as prices go, and others could see some mild improvements to pricing. The largest factor in each area would be based on the overall demand for a certain neighborhood. Now, by improvements I am not saying that we will see any drastic changes, but we could see some positive movement in areas with higher demand. 

How do we really know when we have seen the bottom for a given area? This is an important question for those buyers waiting to be told that prices are at their absolute bottom and they will not get any better. The only way to know for sure that an area has seen the bottom is when we have seen the consistant price improvement for an area over time. In other words, the only way to know when we have seen the bottom is when it is behind us and therefore you have missed it. So, if you are a buyer who is waiting to see the bottom, you will know when it was once you have missed it. For those buyers, if you listen to the general nature of most opinions out there, including mine, you will want to act this year. If you wait around longer to see if you can get a better deal, chances are you will miss out on the best opportunity you will likely see in your lifetime.

The opportunities right now are better than we have seen in our recorded history on home affordabililty. Home affordability takes into account: the current pricing of homes, the current interest rates, and the ability to get financing. As we all know, the current interest rates and home prices are at record lows. You can try to gamble on pricing, but at the same time there is no guarantee that interest rates will hold at their record lows. So, if you end up with higher interest rates, that will downplay any smaller fluctuations in pricing.

Overall, real estate is always an investment. If you take careful consideration and sound advice, it is a good choice for a longer term investment. The old rule is if you are looking at a property for the next five to seven years, purchasing a home is a good choice. Now more than ever, you want to make sure you are getting sound advice when making a decision to purchase a home. It is still the dream of the majority of Americans to own their own home, and now is the best opportunity you may see in your lifetime to do so.

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Brian Webb represents clients in Hudson, River Falls, Stillwater, Woodbury, Oakdale, Cottage Grove, and the surounding Twin Cities Areas and Western Wisconsin. He assists clients with buying, selling, investing, and property management of Twin Cities homes. He offers free advice and consulting services and can be reached at HomesByWebb.com.