Scales tip in favor of home buyers – Seattle Times
Economists’ predictions have come true. Like most of the rest of the nation, the greater Seattle-area housing market has slowed to the point where buyers have an edge.
Of course, you can’t dampen the outlook of the real estate professionals:
But the fundamentals behind Seattle’s market — particularly its strong job growth and dearth of new housing — mean “our area is going to thrive and grow,” Lones predicted.
“If it’s going to be any kind of a slowdown, I think it’s going to be false slow,” she said. “We’re in a very desirable place to live.”
San Francisco is also a very desirable place to live, but it hasn’t become a city of 20 million people because of the cost of living. Palm Springs doesn’t have 10 million folks. The job growth and desirability of a place cannot erase the problems of a real estate market out-of-whack with financial reality.
This housing market benefits buyers who can afford to pay cash for the homes. Otherwise, the higher interest rates on mortgages cancel out any savings you’d get on a home purchase.
Normally, the total cost ends up the same in either market situation if you’re planning on taking out a mortgage. Unfortunately, home prices haven’t fallen as quickly as interest rates have gone up.
My sources tell me that there’s still room for prices to drop, and they will through the end of this year and likely into 2008. The trick is to be patient and wait out the economic trends here.
The bottom point of this downturn has a funny catch-22 to it: the market will eventually pick up when sellers face reality and lower their prices. So far, this has only just begun.
Good luck!