Housing Sales Slump Produces a Buyers Market

On Monday, February 25, 2008, The National Association of Realtors announced existing home-sales had dropped 0.4 percent in January, 2008 from the December, 2007 level. This slippage reflects a 23.4 percent reduction from January, 2007.

All market predictions and evaluations are based on complicated data produced from several even more complicated sources. In everyday language a decrease in existing home sales in January is not unusual. Home sales often decrease in the winter months and rise in the spring and summer when people are moving about again. However, the 23.4 percent reduction from 2007 is unusual. The January reports establish them as the lowest rate of existing home sales to date in a steady 9 year decline.

Lenders are extremely cautious about lending. And, people aren't buying even though now could be just the right time for getting a great home bargain. I've heard realtors characterize this market as "a buyers market."

In A Buyer's Market

Possibly, just possibly, the most important considerations in buying a home are location, cash flow, and being an informed buyer. When the market is slow home prices decrease allowing the savings to be applied to the hidden costs of home ownership.

Hidden costs can crop up unexpectedly as closing costs, fees, and/or taxes. They could amount to several thousand dollars. They range between 3 percent to 6 percent of the advertised price of the home. Most home buyers know to adjust the budget to afford the monthly premium. However, many forget to allow for yearly maintenance, needed home improvements, and decorating.

When house hunting the home buyer should ask about the age of the roof, the solidity of the foundation, the landscape draining around the home, energy and upkeep costs, the amount and type of insulation used, and to be given a copy building plans if one is available. Getting as much information about the property, area, and builder allows for good decision making, fewer surprises to strain the budget, and no regrets to grumble about later.

Taking the initiative to make an offer is a positive move. A buyer's market affords home buyers more freedom and opportunity to make an offer based on research and solid financial planning. Realtors stress location, location, location as the most important resale feature to be considered when buying a home.

Lastly, get approved for the amount of loan appropriate to the family budget. Though lenders are, at present, being overly cautious, there are still loans being made every day. When a home buyer can state they have been approved for a loan sellers are more likely to accept an offer.