Why To Buy Now

With so much publicity in the news and on TV about the housing market, a lot of fear has been raised in people regarding the housing market. It might seem a little "Salesmanish" to write about buying in a time of fear, but the truth is this that this is a great time to buy.

There is a truth that has made many millionaires. It may seem simple, but it is a complex thing. I don't want you to miss this so get ready to write this down...ready...Here it is: Buy low, then sell high.

Seems simple, right?

Let's take a look at human behavior and economics. Humans are emotional creatures. We live on emotion. Everything we do is the result of emotion. People buy things emotionally and justify the purchase logically. Humans also move from danger to security whenever possible. One of the most basic instincts we have is for self preservation. We want to be safe and secure as much as possible.

So what do these truths of human behavior have to do with real estate? Everything!

Real estate is a market that is driven by demand. Demand is driven by security. Security is driven by emotion.

Developers build homes for people that want to buy. When supply is low, developers build homes to increase supply. People buy homes when they feel that their life will be better off owning a home rather than renting. This decision is largely influenced by their feeling that their future is secure and that their finances are stable. The FEELING is what drives people to act or not act.

The dominant feeling by most people who pay attention to the news is that the real estate market is in trouble which produces a feeling we call Fear. This fear that is so common in the marketplace right now is causing people to give money away to those who are willing to buy. In 2007, Uptown Charlotte(a strong market by any standard) has seen a decrease in the sales price/ list price (sp/lp) ratio. In 2006, the sp/lp was 2% higher than 2007. That is a difference of $7,000 on average more that buyers are getting sellers to negotiate.

Earlier I said now is a great time to buy, and this is why. Sellers are working hard to make deals happen and to sell property. Incentives, bonuses, seller financing...people are going to great lengths to make deals happen.

I also said that the buy low sell high was complicated. The principle is basic but the execution is not. As a frugal buyer, it is important to buy wisely and buy for the long-haul. You want to buy a product now that may not be as attractive as it will when you go to sell in a few years. In order to find those areas, you will want a real estate professional that can help you identify what/where things are happening and what properties are good for negotiating.