We all make them: New Year’s Resolutions. Taking stock of all the things we hope to change from the previous year, we vow to make changes in the New Year. What we don’t always do… is follow through. This year, as we enter a new decade and look back at one of the worst real estate markets in recent memory, we have an opportunity to make some New Year’s Real Estate Resolutions.
The U.S. Government provided some stimulus for real estate markets across the country; first was the first-time home buyer credit, then the revised credit, then the revised/extended credit that now includes a credit for buyers who have owned their previous homes for 5 out of the previous 8 years. The bad news is that this particular stimulus has an expiration date of April 30, 2010, so what then? If we can make – and stick to – a few real estate resolutions in 2010, there’s good news for the market as well.
If you’re buying or selling a home in 2010, keep these real estate resolutions in mind:
The real estate market is not changing… it has changed. Ignoring this fact any longer is the same as making a decision not to sell. Many sellers have been unrealistic about their expectations based on what they paid for it in 2005 or what their home might have sold for last year. In effect, what they’ve been doing is chasing a ball down a hill. It’s a failed strategy that has frustrated many people, and has negatively affected many markets by contributing to the inventory problem. Remember this: Cost has little to do with value; if someone had given you a house for free 5 years ago, would that make it worth less today? No. The value of your home today is largely driven by the cost of an equally-desirable substitute, i.e. competition.
New Real Estate Resolution for 2010: Start fresh and stop looking at the past. Look at your home like a buyer would today based on current competition. Focus on the current market and establish with your Realtor what a realistic price will be going forward.
Establishing this new focus involves other aspects of marketing. The price your home will sell for is largely influenced by current competition, but it’s also affected by its relative condition. In the new market that we have now, your home is in a price war and a beauty contest – at the same time. If you ignore the latter, you will likely continue to chase the ball down the hill and you’ll be disappointed with the result. Far too many sellers are wishing their lives away looking back at what they believe they could have sold for last year or the year before, while ignoring what’s going on all around them today. It’s easy to understand, but to be a competitive seller going forward you will have to price your home competitively and pay some attention to things around the house that need touching up like landscaping, cleaning, painting, de-cluttering, staging, etc.
New Resolution for 2010: Look at your home like today’s buyer will, rely on the objective advice of a good Realtor and put your best foot forward. Sellers must compete for buyers, not just wait for them to show up.
The buying opportunities and incentives won’t last forever. Buyers and sellers, think about the federal tax incentives that are available if you contract for your new home by April 30th and close by June 30th. If you’re a first-time buyer (defined as not having owned in 3 years), you may be eligible for a federal tax credit of up to $8,000. Even non first-time buyers may be eligible for up to $6,500, so consider these fleeting opportunities as you plan for 2010.
New Resolution for 2010: If you’re going to take advantage of current housing inventories and low mortgage interest rates, do it sooner than later and don’t procrastinate another year. No one rings a bell at the bottom of the market.
When you consider all of the pricing pressure we’ve experienced in recent years, the number of homes for sale in any given market and historically low mortgage interest rates, 2010 is likely to be one of the best home-buying environments in decades. This has been and will continue to be a sobering reality for many sellers, but it can be the opportunity of a lifetime for many buyers. In fact, many sellers ignore this opportunity when selling their homes. Remember, this changed market will also work in your favor if you sell and then buy another home. Let’s all think about making these New Year’s Real Estate Resolutions for 2010, forget what’s behind us and look forward! There’s tremendous opportunity in any market.
New Year"s Real Estate Resolutions
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