(x + 1)2 + (2x2 + x + 1) = Bottom of the Market
Everyone knows there are a whole bunch of fence riders out there. Buyers are watching the market, waiting to get in at the "right time". When is the right time? What magic number is a buyer waiting for or what feeling is a buyer waiting to have before they're comfortable offering on and buying a home? Daily, I receive calls from potential buyers and investors digging for information about the Bonita Springs real estate market and sharing their opinion about the market and value vs. price. Mostly, the buyers that are waiting usually have no factual reason for doing so. I surmise that they're just waiting for everyone else to do it, first. The old adage applies: "There's safety in numbers".
Recently, the Florida Association of Realtors released an article regarding the price of homes vs. getting priced out of the market by rising interest rates. An interesting comparison is offered using the value of a home priced at $250,000. With a 20 percent down payment and 30-year fixed-rate mortgage at 6 percent, monthly payments would be $1,199.10 (principal and interest only). Even if the price of this home were to drop 10 percent one year from now to $225,000 - but mortgage rates rise to 7 percent - the monthly payment for a 30-year fixed-rate mortgage with 20 percent down would be $1,197.54 (mortgage and interest only) - a difference of $1.56 a month.
Could this be point break? The time where values have reached the lowest point before being effected by other factors of the market? There are those who think so and have decided to take action. I've recently worked with a few buyers and Canadian Investors who decided to take advantage of the information and decide that this was the season to buy. For them, it was time to start enjoying the Florida lifestyle and begin making the most of their retirement this season. My most recent buyers have been folks making the relocation a reality before the next school season, Canadian Investors finally priced into the market with the dollar value and home values lining up and Baby Boomers finally deciding that it's time take the plunge and begin to enjoy their retirement years.
One thing is certain, there will be no alarm that goes off indicating the right time to buy. For the fence riders out there: Remember, the only time the bottom can be identified is when prices are actually going back up. If you do your research, watch the market vigilantly and negotiate a great deal going in you will be able to use and enjoy your Florida real estate while the others are watching and waiting for the courage to get in.