Waiting for the Bottom: You Could Be Left Just Waiting

In recent weeks, several of our buyers have found a great property at a great price, then, after talking to their brother-in-law or their son who works at Best buy, they tell us "We are going to wait for prices to come down even further."

The next week, that same great home at a great price has sold. Our client insists that there will be others at even better prices.

Other, more realistic clients see that prices have come down significantly here in the Coachella Valley and realize that the Real Estate market is cyclical. They know that even if prices do come down a little more, they will eventually come back up. They are not trying to make a quick buck, they are looking for either a primary or second home that they can live in and enjoy for more than three or four years. They know that the tax advantages of owning a home for those three or four years will still be significant.

They know what we know: Whatever you buy today will be a GREAT deal in three to five years.

Those who sit on the sidelines and wait for the bottom of the market may be left just waiting.

The problem with waiting for the bottom is that we only know where the bottom was in hindsight. We never know in real-time that we have hit the bottom of the market.

Greed is what got us into this mess. Greed will keep otherwise good buyers out of the market while they wait for a chance to be greedy and "steal" a property.

The Coachella Valley is a market significantly different from others in the state and country. We have a HUGE resort property market. A greater percentage of the homes here are second homes owned by relatively high-income and financially stable owners. These are people who are in a position to wait out any downturn in the real estate market and not at any risk of foreclosure.

The appreciation in the area has been not only due to the overall housing boom seen throughout the country, but also driven greatly by the tremendous growth we see occurring here. The population in the Coachella Valley is expected to DOUBLE its 2006 number by 2012.

Buyers who can afford to pay cash now or who qualify for a conventional fixed-rate mortgage or 30 year fixed with a ten year interest only period are in a good position to buy a great home at a great price.

My advice to buyers who are sitting on the fence: "Get off the fence. You're in danger of getting a picket stuck in a very uncomfortable place."

Gary Drake
The Thomas and Drake Group