Market Watch - Spring Season for Buyers

Will the warmer weather bring out more buyers?  Many markets that experience colder weather such as Boston, New York, and Chicago saw a slight upturn in sales towards the end of the first quarter.  In Boston for example, sales were still down in March from where they were in March 2006, but the overall Q1 sales came out fairly even with last year.  The decline in median home prices also slowed during the first quarter and the median prices for condos continued to rise a bit.  For example, the median selling price of a Massachusetts condominium rose 3 percent to $279,000 (from March 2006), while the number of condos sold fell 1.4 percent from March 2006 to 1,765.  Overall condo sales for the first quarter however did rise about 2%.  We must think in these positive terms because this does actually show possible positive stats for the next couple quarters.

In markets with more extreme weather, we typically see more buyers emerge during the Spring and Summer months simply because the house hunting weather is more agreeable.  With the power of the Internet now, home buyers and condo buyers use this time to do research and gather sales information.  Will these researchers turn into buyers over the next few months?  Let’s hope so.

So many condo projects are on hold right now due to the slowing in presales, difficulty in obtaining construction loans, etc.  Many companies that support these projects are now loosing business due to the “holding pattern” many projects around the country are in.  Unfortunately, many developments that go into a holding pattern do not come out.  If the buyers come off the fence and out into the Spring weather to actually take a serious look at these new condos, then maybe there is a chance for a better forecast in the condo market.  It is not a terrible time to buy if you are looking for a home to own and live in for years to come.  Too many people are hung up on the idea that they are going to earn quick money and appreciation by buying a home.  People want to add to their net worth with housing or take out equity lines of credit to increase their liquid capital.  These times are over.  To be quite frank, taking out equity lines of credit on property you still owe money on is a bad idea.  The only time this is a good idea is if you have paid off the loans, you have considerable equity, and you want to reinvest that equity in mutual funds, retirement accounts, etc. 

The idea for condo buyers now is to look for something they love, plan to own it for a while, take out a traditional mortgage with payments they can afford, and take advantage of all the great buyer incentives out there…these can drastically decrease the initial costs of purchase.