In many ways, the trickle down effect is happening in reverse. Trickle down economics was first introduced during the Great Depression, and later made popular by President Reagan, saying that "money was all appropriated for the top in hopes that it would trickle down to the needy." It never seemed to work properly in its intended order. Instead, we are now seeing a much different kind of trickle. First, the major corporations, banks, and insurance companies go bankrupt. Stocks around the world plummet. People lose their jobs, millions lose their homes, it becomes much harder to get a loan, and people are frozen in fear therefore not spending money which makes things even worse.
The point is, if there is one, that times are different and difficult, but we must continue to move forward. Thankfully, the election is almost here and Obama seems to be ahead in the polls. We hope that things will change, but can't expect them to change overnight. The fact is, and most people seem to agree, that we have a good year ahead of us before we really start picking ourselves up and brushing ourselves off. Suze Orman said that the economy is in the ICU, and will be for another year or so. After that, she says, it will move into the hospital, where it will continue to need treatment for some time, and then it will finally be in recovery.
Many home buyers are waiting for prices to drop further before they enter the market. As Anja said, you need to be careful what you wish for. Remember, this is our economy you are talking about, and we don't want to see it go even further down the tubes. Everyone is affected by this in one way or another, and we are seeing the effects around us more and more each day in friends that are losing jobs, taking pay cuts, or simply not getting as much work.
It is amazing that Zephyr has a large new office tour each week. There is a lot of inventory out there, and now is the time to take advantage. Granted, prices may come down from where they are, but if the right property comes along, we can negotiate a lower price. If you get the house for 10% under list price, you should feel safe.
The main tips for working as a buyer in this market are:
- First step is to get pre-approved for a loan (this was always the first step but is even more important today
- As you continue searching, and time goes on, continue to check in with your lender to see if the loan programs you are approved for have changed
- Be ready to go, but not in a hurry...timing is important in negotiating
- Don't be afraid to make a low offer; the worst they can say is "NO"
- Once your offer is accepted, be diligent in your inspections; this will give you the opportunity to renegotiate should you find anything
It is so much nicer to be a buyer in today's market; you can breathe, take your time, negotiate, and make wise and informed decisions.