**Danger** 3 Reasons Why People Are Losing Today! How You Can Win!

Posted by Help Now on Thursday, June 25th, 2009 at 4:10am.

About 2 years ago, I had a buyer come to me and say he wanted to buy a million dollar home. Based on my knowledge of the market I suggested that he wait. He waited.
He later told me, “Dave you were right....the cost of a million dollar home did exactly what you said it would do.” He was glad he listened.

Today, I hear people say, “I am going to wait” but the situation has changed. There’s a huge difference between 2 years ago and today. The Demand is different, there is huge variance in different price ranges, and interest rates 2 years ago were not nearly as low as they have been this year. Waiting was smart 2 years ago, waiting today can be costly.

There are 3 main reasons why waiting right now is financially dangerous.

1. Demand. Today demand is influencing the opportunity for a good deal. The best time to buy if you want to get a good deal is when supply is high and demand is low. That is called a buyers market. Right now we are in a recession. This is another great time to buy. Those who bought a home in the last recession in Utah won because they bought their home for a low price.

Utah has officially hit a bottom in demand. How do I know? Because I am in the market I see what is happening and know all the numbers before the reports come out. If things remain as they are, then we have hit a bottom. The only reason why this won’t be a bottom is if unforeseen factors come into play. Right now June and July are scheduled to have more home sales than last year! If this continues we have hit a bottom in the Utah Real Estate market. This means that demand will increase from here. With demand going up, prices stabilize and begin to increase.

2. Variance in areas and price ranges.
There are some areas where demand is high and prices are stable. We track and analyze areas and price ranges to know which areas sell and which areas do not. If you are a seller you can see your own area statistics at www.utahdave.com by using our crystal ball. It is important to sell your home when the demand in your area and price range is the highest if you want to get top dollar for your home. Waiting can cause you to miss this opportunity and be stuck with your home on the market when demand is low.

3. Interest rates offset prices. In this recession interest rates are lower than they have been in over 20 years. Why is this relevant and important? I was talking with Clark Ivory of Ivory Homes and he mentioned how he is always trying to educate his buyers about interest rates. Every homebuyer should know that a .25 percent increase in interest rates requires a home price to fall 3% to offset that additional cost. Interest rates for some people have gone up 1% in just the past month. That means prices would have to fall 12% in order to offset the additional cost of the higher interest rate. It is highly unlikely that prices will fall another 12%. With the way the market is going it is more likely that prices will stabilize and begin to increase. As prices increase, so will interest rates. Those that locked in the low rates before they went up scored! Others can still get a good deal, but have to act fast to get the current rates before they go up again.

Right now, we are seeing multiple offers being placed on homes. When there are multiple offers on a home the price does not go down. Multiple offers are an indication of increased demand; when demand increases, so does price. With interest rates rising, multiple offers, and increasing demand the window of greatest opportunity is narrowing to a close. These times will be talked about for years to come. Don’t be the one to look back and wish you’d taken advantage of today’s market. The time to wait has passed, it is now time to act.

About the Author:

Utah Dave - Neighborhood ExpertUtah Dave - Daybreak Neighboorhood Expert and Local Resident

My friends nicknamed me Utah Dave in high school because they said it didn't matter where we went in Utah, I would know how to get there and who we needed to talk to. The name sticks today as UtahDave has formed into a professional real estate network of Neighborhood Experts all across the state. I live in Daybreak with my wife and 4 amazing children. I enjoy dancing (which is how I met my wife Dawn) as well as traveling, coaching, and learning.

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