THE STATE OF THE REAL ESTATE MARKET

Newspaper articles, magazine headlines, and cocktail hour conversations recently speak of slowing market times for homes, a glut of homes for sale on the market, condominium complexes springing from every block, and falling prices in some areas.

Is the sky falling?

It really isn’t falling, as Chicken Little learned in the famous children’s tale.

However, after years of red-hot real estate markets across the country, it’s time for a period of adjustment, to correct and balance things out.

Overpriced properties, below-average condition properties, and poorly planned/built/designed properties will now fall to the correct price and sell. How does this happen? Often, owners are reluctant to sell for less than what they thought they could have sold for in the recent market, and don’t adjust their prices accordingly or quickly enough. This leads to long market times, and a glut of properties in the market.

Don’t run and panic, and don’t fall for the media frenzy about the sky falling on the real estate market. On the contrary, now is an excellent time to buy a property, with negotiable purchase prices and interest rates that remain reasonable. Homes in excellent shape, priced well, and marketed correctly sell very well in this type of market atmosphere.

Overdevelopment in certain markets, such as urban condominiums, luxury properties, and second homes have slowed. Prices have already dropped to almost their lowest, meaning, much of the air has already been let out of the proverbial bubble.

Contrary to popular belief, rising interest rates, the rental market improving, a year or two of relatively flat home price gains, or even a small deflation is exactly what the market needs to keep in balance. Every decade I’ve been alive, the ebb and flow of the market has provided a “boom” and “bust” period that consumers are quick to forget, but which are necessary for continued economic growth and revitalization.

Real Estate is one of the safest long-term investments you can put your money into. Working with the right partner for your real estate needs, and not panicking when the acorn of life hits you on the head (whatever that might be) is key to knowing that you can find a deal or make money in any market, if you make the right decisions and look to the long term.

So don’t panic. Things are looking up for 2007!

Kyle Gunderson
Owner/Broker, Infinity Real Estate and Mortgage Services