Wednesday, May 28, 2008

Is Now A Good Time To Buy?

It sounds like Ryan Frank at the 'O' is growing a little tired of the constant cheering too.

From the Oregonian:

Portland-area home prices dipped a bit deeper in March, leading buyers to question:
When is the right time to dig for a deal?
The Standard & Poor's Case-Shiller price index of existing homes in the Portland region fell 4 percent in March, compared with the same month in 2007, marking Portland's biggest decline on record.

With school about to let out, the summer buying season is about to warm up.
So should buyers be closing the deal? Or will prices keep falling, eroding their investment in a new home?
Real estate brokers -- a chronically optimistic bunch -- will tell you that now is a great time to buy.
Interest rates are low.
Selection is up.
Prices have fallen.
All are true.

Real estate broker Lee Davies, who sells homes in Washington County and Northwest Portland, said people who own a home now and want to move up may not make as much when they sell their current home. But they should be able to offset that loss by buying their next home at a reduced price.
"If you sell for a little bit of a loss, you're going to buy for a little of a gain," Davies said. "In the end, you're going to be just fine."
Davies encouraged people to buy before the market starts to take off again.
"You're not going to know where the bottom is until we're past the bottom," Davies said.

But be wary.
That's the advice Mark McMullen gives friends.
McMullen, a senior economist at Moody's and a Lake Oswego resident, says the Portland area still suffers from a glut of unsold homes. In April, it would have taken 10 months to sell off the inventory of unsold homes at the current rate of sales, according to the Regional Multiple Listing Service.
McMullen says that's more than twice a healthy supply. In other words, supply is far outpacing demand.
He says the excesses will lead desperate sellers and homebuilders to drop prices to offload homes through 2008.
Those price declines could take a sizable bite out of homebuyer's investments in the short term.
McMullen forecasts Portland-area prices will bottom out in late 2008. Based on National Association of Realtors figures, McMullen projects prices will be nearly 14 percent off their peak from last fall.
His advice to buyers (and his own friends): "At this time, I'd be cautious for a few months."