How is the market anyway?

Working as a real estate professional I am approached by friends, family, and others that I run into on a daily basis with a variety of real estate questions.  While this is not a new phenomenon, I have been fielding one particular question in a disproportionate volume lately.  That question, “how is the market right now,” or some close derivative, usually elicits the same response from me each time I hear it.  “It depends on which side of the market you are sitting.”

As a buyer, the market could not be better today.  There are deals (and steals) out there today, of which we have not seen in nearly ten years.  Realistically, home prices in southeast Michigan are at levels roughly equivalent to those from 1999-2000.  I heard a report on the radio this morning that nationally we are at 2004 pricing. This provides truly an unbelievable opportunity for those who did not invest in real estate in the past to essentially jump back in time and take advantage of the best personal wealth builder available to most of us, a home.

I know what you’re thinking, what about the credit crunch?  It’s true, that credit may not be as readily available for any purchase, including a mortgage, today as it was a few years ago.  While the pendulum may have swung a little too far in the tightening direction recently, it’s because it had come from way too far in the loose direction in the years that proceeded.  Is it really a negative thing to think that we should be putting up a significant initial stake in the largest purchase most of us will ever make?  The bottom line is that there are still many options available for those who are looking to make a purchase.

So far this discussion has focused on the buying side of the equation.  And I know that my initial comment stated that your view point on the market depended on your role.  So I guess the natural assumption would be that if you are selling the market is not pretty.  That’s not necessarily true.  First of all, there is great deal of activity in the marketplace today. Yes, I just mentioned that prices are down from their record highs of the last few years. That said, everyone that is selling a primary residence must be moving somewhere.  For most, that means buying another home.  So the real question comes down to where and what you are buying.  If you are buying in the same general market and buying more home, you stand to do quite well in the “net” of the two transactions.  This will be the topic of my next article.