You’ve Got The Upper Hand!
Why A Home Buyer's Market Puts You In The Driver's Seat
In the boom years of real estate, home sellers held a winning hand over buyers. They could dictate prices and terms to multiple bidders who were lining up at their doors. Today, that’s not the case, and buyers are the ones holding all the aces: it’s a buyer’s market!
First, what is a buyer’s market? Quite simply, it’s when the advantage is with the buyer. A buyer’s market is one where prices are competitive, choices are abundant and lots of bargains and incentives are to be had.
Consider the following advantages for home shoppers today.
Prices have leveled off.
In some areas, prices have even declined. Regions that were burning hot in the past have begun to cool and level off, giving the buyer a unique opportunity to find affordable housing that may have been out of reach before. Sellers in this environment—by necessity—are much more prepared to negotiate. While there are no guarantees you’ll get everything you want—bargains are all about give and take—you can be assured that your needs will be heard. Most likely, you can get the house of your dreams and still have a budget leftover for decorating.
Houses are staying on the market longer, meaning more choices for you. Previously, home shoppers had to make an offer immediately if they wanted to get their top choice. Today, there are a wide variety of homes for sale, with a better chance of getting the home that fits your needs, without the super-stiff competition from lots of other buyers as was seen in years past.
Mortgage rates are historically low.
Interest rates are still affordable, remaining near 6.5 percent. Looking back, 1984 saw fixed rate mortgage interests as high as 14.75 percent. Even just six years ago, interest rates ranged from 8 to 8.5 percent. A half-percent rate difference on a $200,000 mortgage, from 6.5 percent to 7 percent, translates into an increase in monthly mortgage payments of $66.00. Over a thirty-year mortgage, that’s an extra $23,926! When rates are this attractive, it just doesn’t make sense to try and time the market.
Many builders are offering incentives.
Discounted financing packages, value-added incentives, and even first-year mortgage payments are some of the incentives builders are offering, allowing families to get in on the host of benefits that homeownership offers. Home equity, the value of a home minus any mortgage debt, accounts for more than half of the total net wealth of the typical family, making homeownership the primary source of a household's net worth. This makes owning a home the fundamental first step toward accumulating personal wealth. And don’t forget the incredible tax benefits as well!
Homeownership is always attractive.
Besides being a stepping stone to a future of financial security, homeownership provides a sense of community and personal satisfaction and inspires civic responsibility. Homeowners are more likely to vote and get involved in local issues. Studies show they are also more content with their lives, owing to the spillover benefits from an increased social circle, a stronger sense of belonging and increased activity in community groups.
Homeownership is the cornerstone of the American way of life and the fulfillment of the American Dream. A buyer’s market allows that dream to be possible for you as well.
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