Realty Insider Blog

“Is now a good time to buy?” is the question that everyone asks these days. Well, the simple answer is that it is a better time to buy than to sell.

When everyone else wants to buy, it is generally a sellers market. Last year buyers were on the sidelines watching where the market was going (it went down.) These days it is a stare-down between buyers and sellers with sellers feeling they have given “the greedy buyers enough.” Conversely, the buyers want the “greedy sellers” to come down more...

So, what to do? To gauge the market lets look at one neighborhood where I specialize: The Gates of Mclean. Looking at the Dalton 1br/1ba condominium unit with 1 garage spot, the average sales prices were as follows:

2003: $252,450
2004: $289,700
2005: $330,800
2006: $292,000

(Numbers are from a quick MLS search where sq footage was given for the unit. The above does not account for seller concessions.)

We are basically back to 2004 levels if we compare apples to apples. So, about a 10% depreciation as opposed to the 15-20% appreciation seen in previous years.

Now this is for a condominium in Tysons Corner. Arguably one of the more desirable locations in the area. Single families and condominiums in places further out (like Brambelton) has taken a bigger hit. You can now get a large like-new single family there for under $600,000.

So, what to make of this? I would say that if a buyer that can get a home in the current market at a 10% discount from the peak and with a 3% seller concession heor she is getting a great price.

Will the prices go down? Will they go up? Will they be flat for the next 5 years? Nobody knows. If anyone did they would either be selling or buying like crazy – and I have seen neither.

My advice?

1) Don’t try to time the market.
2) Buy when you have a need for a new home.
3) Buy the size you need in the best location you can afford.
4) Qualify using payments for a 30 year fixed. Then take out a 30 year fixed with a 10 year I/O or whatever you are comfortable with.
5) If you stay long enough you will make money in real estate. The long term average is about 5% appreciation per year (adjusted for inflation.)
6) Thinking too much about what way the market will go will get you nowhere and result in analysis-paralysis.

and most importantly

7) I can almost guarantee that you will miss the bottom of the market. By the time you realize you missed it and get over your frustration we’ll be right back at the top again!

8) Find the home you love, sit down in your couch with a meal made in your new kitchen and then watch Babel on the 42" inch plasma you bought with the seller concessions you got! Much better than sitting around worrying!