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Why Wait To Buy In '08

Apr 10, 2008
Arizona has been one of the leading states in growth the last several years. It has great job opportunities and a lot of opportunity, but the recent down trends in the market have shown how reliant Arizona is on the real estate market. The entire economy has been effected. What is the real reason for this slow market. When it comes down to it, it is not necessarily because of the mortgage crisis or because of the economy. It is primarily because buyers have lost confidence in the market and are not buying.

Now there is a huge inventory of homes on the market. There are a lot of people who want to buy a home but are waiting for the market to come down even more. They may put in low ball offers, but there is a heavy resistance to buying a house close to the asking price. The values are down tremendously any many areas up to 50% from previous years. The home market is very affordable and there are many attractions to out of state residents who may settle down in Arizona in coming years. Is all this trouble in the market really for the better?

Before the boom an investor could buy a home and rent it out to cover the payments. The market appreciated around 10% on good investment. On a $250,000 house that is $25,000 a year in appreciation. Not a bad investment. Especially when you consider that you can buy a home like that with 5% down. After the boom it was virtually impossible for an investor to cover his or her payments on an investment. Maybe this market crash is what we needed.

I heard an investor talking the other day about the good old days in the late 80's when the market crashed. I never heard anybody refer to the late 80's as the good old days before. I always heard of it as a disaster. From an investors perspective it was a great time to pick up bargains. Every investor would like to buy property 50% of the value, the only problem is they want to buy when the market is at it's peak. When it comes time to buy in a slow market they hesitate and wait for a "bottom".

The honest truth is it is rare that anybody can predict a "bottom". Wise investors buy on while the market is going down and sell while it is going up. That saying to buy low and sell high is wise, but I don't think they were trying to say only by at the very bottom and sale at the very top. That would be nice, but you tell me how many people you know that have done that. I don't know any, and I know a lot of investors. Buy on the way down, sell on the way up. It is as simple as that.

Well what is the problem then? Why aren't more people taking advantage of the market? If you aren't taking advantage of the market because you are afraid of making the right decision then the best move is to find an honest real estate agent who will guide you through the process. Let me reemphasize that you should get an honest realtor.
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