Homes Sales Up; Inventory Down as Buyers Jump Back In

It seems unexpected, but the recent credit crisis that is now gripping the world's financial markets is driving first-time buyers and investors into the real estate market as fears of rising mortgage rates and "disappearing" home loans prompt fence-sitters to jump in now.

Yes, you heard me correctly. Ever since the financial crisis of the past few weeks began to break, showing activity and offers on our lower-priced listings has gone way up. We think that many first-time & investor buyers are fearing a loss of available home loans and higher rates, so they are taking advantage of the softer prices in our market and are moving now, while they believe they still can.

This is good news for everyone, because as the lower-priced inventory is bought up, this opens the door for move-up buyers to get into those larger, more expensive homes, restarting the market and likely marking the beginning of the end of softening real estate prices in the Seattle area.

The lastest edition of the NWREporter, the monthly newsletter from the NW Multiple Listing Service, reports that pending sales rose in September by 4.1% over September of 2007. This is the first time in the last 19 months that sales for the current month & year were higher than those of the prior month/year. The buyers are back.

New listings system-wide were also down last month by double-digits over new listings in September of 2007. By the end of last month, the total number of available listings had only climbed as high as the total number available last September. As existing inventory is bought up, market pressure will begin to push prices back up, too.

So what's the truth about home loan availibility? According to Mike Welty of Liberty Financial Group in Bellevue, "Forget the news. Mortgage loans are readily available, at excellent rates and you can still get 97 percent loan to value....There is a lot of flexibility in programs, qualification and opportunity...Underwriting is tougher – you need a down payment and you need a job!" But, loans are available to people with good credit and at least some down payment. And, don't forget that first-time buyers who earn less than $75k a year can get up to a $7,500.00 tax credit if they buy before July 2009.

Click Here to read the entire report from NWREporter and please share it with your friends & colleagues who have been waiting for "the bottom of the market" to buy that first home or investment property. We have hit "the bottom" of the market and it is now poised to begin going back up. Its time to get out there and buy before this fantastic opportunity in low prices goes away.

Happy Home Buying!
Tim & Keith