Kathy's Korner - September 10, 2008

Real estate and economics are usually intertwined

Kathryn MillerSeptember 9, 2008 

Kathryn Miller is a Realtor with Coldwell Banker United Realty. Contact her at kathy@homesinyork county.com.

Real estate is not rocket science. It is a function of economics and psych-ology. We cannot control the former, but should strive to under-stand it.

The latter we can use astutely, but that is another column.
As every student knows, the first lessons in Economics 101 distinguish between "wants" and "needs." Both home buyers and sellers should always, especially in our current market, take time to objectively differentiate these. Identify the length of time you plan to hold a home, the importance of location, neighborhood and lot, and the house's "bones."
Ten years ago, how many of us were concerned with granite in kitchens and baths? And now it can be the deciding factor in the purchase of your home.Something seems askew with our thought processes these days. Cosmetic items are just that - shallow features easily changed. Besides, the kids will probably crack or stain something anyway. You can update later. By then, granite may well look dated. And those evenings in the backyard catching fireflies are more vividly remembered than what color your countertops were.
Next in Economics 101 come the laws of supply and demand. These are self described "laws" simply because they reflect strong forces that, time after time after time, prove true.
High supply with low demand equals decreasing prices. Today, we are facing such a scenario in our housing market - a glut of inventory accompanied by a decrease in buyers with a volatile mortgage market tossed in the mix.
However, there are some mitigating factors. Charlotte continues to be a destination mecca. People, young and old, continue to move here, or at least aspire to move here. The rust belt is relocating to the Sun Belt. Retirees are simply tired of snow. But they may have not sold their homes in Ohio or Florida or Pennsylvania. Or they sold but walked away with $50,000 or $100,000 less than anticipated, leaving them both skittish and with less cash on this, their buying end.
Are home prices falling? Yes and no. It depends on the individual situation.
Are you comparing the current price with upwardly adjusted 2005 values or with inflated 2006 values? If your house is one of 50 active comparables, well, you have to stand out to get sold. And buyers are price driven.
But there is a line in the sand past which sellers simply cannot tread. Is now a good time to buy? Yes, without doubt! So, look for a value, but do not shoot yourself in the foot by waiting too long and searching for too much of a steal.
Remember, this is the home you come back to each evening and where the Christmas tree stands proudly. Value can be more than money.

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