Fab Real Estate Blog: What Kind of Market are We in?

What Kind of Market are We in?

Everyone wants to know what the real estate market is like today.  Is it a bubble?  Is it going to burst?  Did it burst already?  I don't have a crystal ball, so I can't claim to know all the answers.  But, as a real estate agent, I can make some educated guesses based on experience.

I don't believe my market area (Western Connecticut/Greater Danbury area) is experiencing a bubble, nor are there any signs of an impending bubble burst.  Prices have stabilized.  Some areas have seen slight price reductions, other areas continue to see slight appreciation rates.  Normalcy has returned to the home sale market.

The available inventory of homes for sale on the market has increased during the course of 2006, while at the same time some buyers have taken a step back, thinking prices will drop.  More homes for sale mean greater choices for buyers, and fewer multiple offer situations.  However, some smart sellers with homes priced right for their condition and location are still enjoying multiple offers from multiple buyers.

Interest rates remain near all-time lows.  If interest rates shoot up dramatically, then might that mean a reduction in area home values?  Possibly.  But, with higher interest rates, that also means that that possibly-lower-priced home may actually cost you more due to the increased interest payments.

I've met many "buyers" over the years who have refused to buy, demanding that they will wait until the bubble bursts and prices drop.  Many of them are still waiting 5 or 6 years later.  They've missed years of extreme price appreciation, equity build-up, mortgage interest tax deductions, property tax deductions, and perhaps most importantly, the personal joys and pride of home ownership.

I closed on my own current personal residence in September, 2005.  Many consider that to have been the peak of our area's prices, and the end of our "sellers' market."  But, since then, in this new and different market, I have still enjoyed about a 7% value appreciation on my home.  That is equity that those sitting on the sidelines and renting did not earn.

I believe that home ownership offers so many advantages - both tangible and intangible.  Buyers and sellers need to take some of the national headlines they read about the "bubble" with a grain of salt and talk to their local real estate agents about their immediate area's market conditions.  Make informed decisions about your real estate needs and wants and enjoy them for years to come.

Comment balloon 6 commentsDon Fabrizio-Garcia • December 26 2006 01:50PM

Comments

Hey Don.. welcome to Active Rain. This post was well written and deserves a well written comment.. sorry to let you down!! ;)  Isn't it funny how people say they will buy when it hits bottom, but then (like you said) they wait over 5 years and still haven't bought?? amazing.   Keep posting.. and congrats on the new home.. I hope you are enjoying it. :)

Posted by Nick M., Realtor-Appraiser in West Palm-South Florida Real Estate Appraiser (Certified Residential Appraiser- West Palm Beach Real Estate) over 11 years ago
Good entry.  Keep up the good work DFG!
Posted by Maureen McCabe, Columbus Ohio Real Estate (HER Realtors) over 11 years ago

Nick - I'm a firm believer in the many values of home ownership - both financial and otherwise.  I don't understand paying thousands of dollars monthly in rent, when home ownership offers so many advantages.  Thanks for commenting!

Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) over 11 years ago
Maureen - Glad you found me!
Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) over 11 years ago
Don, I am your biggest fan... no I guess I am probably way down the list after all of your family.  But when it comes to your blogging, you will find me one of your biggest fans.
Posted by Maureen McCabe, Columbus Ohio Real Estate (HER Realtors) over 11 years ago
Maureen - I've always wanted a fan base!
Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) over 11 years ago

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