Parsons Real Estate Group

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Real Estate Market July 5, 2007

Posted by Mike Parsons
July 05, 2007 at 08:33 PM

This real estate market is in slow motion. Not quite as bad as the National and Local Media would have you know, but still slow. Things are selling, just slower than they were 1-2 years ago. Due to the much longer marketing times we see sellers adjusting their prices to the slow demand, thus, prices sagging a little. We haven't seen any big dips like Florida, Arizona, Cali, etc..., probably 1-5% less than prices in 2004-2005, early 2006. I expect this trend to continue through the end of 2008 at which time we will see a bottom.

Rates have ticked up a bit to approx. 6.875 or so but they are still very good compared to the average over the past few decades.

This expected slow down is magnified by buyers poor confidence from seeing media hype, tightening of lending standards which has taken many subprime buyers out of the market, over supply of inventory in Columbus's surrounding, newer over-built subdivisions, and seller's (ARM's) adjustable rate mortgages starting to shift to higher variable interest rates this year.

Note to Columbus Real Estate Buyers:
Now is a great time to buy. Think location. On the outskirts you can find every third new build for sale. Invest in a community that maintains strong demand. You can find that in neighborhoods where there are few homes for sale, and in cities that are land locked. - If they are going to be building down the street after you buy your home why would they buy your house in 5 years rather than build their own new home? Invest in a home that appeals to a wide audience yet has unique factors you can't find in the home down the street(historical character, central location, convenient to all highways, functional floorplan, walking distance to parks/schools, close to hotspots/nightlife/culture, don't be afraid to make cosmetic improvements to create value)
And remember, if you have a home to sell before you buy, you may get a little less for your home when you sell but you should be able to get a great deal on the new home you buy.

How can I put myself in the best resale position down the road?Buyers and sellers remember: You may get more square footage and a cooler updated floorplan buying a new home but don't be surprised when resale time doesn't pad your wallet. There is a trade off between new homes and resale. New homes typically won't start appreciating until year 4-5. Older, centrally located, established neighborhood homes start appreciating from day one. When you buy new you pay a premium for new mechanicals, roof, ability to customize, and always competing with multiple like-king houses in the neighborhood, etc...When supply is high in a neighborhood, homes are always competing with one another and prices never appreciate.

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