Where is Chicken Little?

October 24th, 2006 categories: Home Buyer, Mortgage, Real Estate, Real Estate Tips, Sacramento, Seller

All of the Chicken’s Little’s are crying, that the “SKY IS FALLING.”

No, no, that’s just the media talking. Not true, Real Estate is the safest and best investment that anyone could ever make. Always has and always will be. The jump in equity such as we have seen over the past few years was fun while it lasted. It doesn’t mean the Sky is Falling…it simply means that now we must go through an adjustment period and bring prices back in-line with salaries.

Unfortunately, salaries did not escalate at the same pace as the home value did, therefore adjustments must now be made. Otherwise, only the elite could possibly afford a home. Sellers got excited, Builders came alive and decided to start buying property to build like crazy, as prices continued to escalate, the Investors decided to sell and move to better hunting ground, Flippers got a little greedy and soon there was an excessive amount of properties being put on the market.

Talk started, media got excited, sellers became nervous and suddenly For Sale signs went up all over the place! Because of the quantity of For Sale signs the media focused on the “Chicken Little” syndrome, and Home Buyers became frightened and there you go…Panic!

Many homeowners who have loans with a 100% financing and/or interest only loans that didn’t realize their payments would escalate are trying to sell now because they can’t afford the payments. These are typically the homeowners that couldn’t qualify for a 30 year loan to buy their house and were banking on the fact that they could simply sell in about 3 years and make a killing.

Not all loans are for all Buyers, it’s very important to make sure that you understand the type of loan that you ultimately have to live with. Home owners, who have lived in their houses at least 3 years and plan to stay, should have nothing to worry about … that is, if you have not touched your equity. You can’t use your house like an ATM machine and expect to sell and have anything left over if you are using your equity.

You should regard the equity in your home with respect and safeguard it for a rainy day…that’s what this Real Estate market is right now…a Rainy Day! As home prices go down to match salaries, it’s time to stay in your house, make improvements and wait until the stabilization has leveled.

Frankly, it’s a FABULOUS time for Home Buyers to purchase some of the houses on the market right now…there are some great buys and sellers are willing and ready to negotiate. Super time to pick up some great deals!

Remember… what goes down, MUST come up. Home Buyers need to buy soon before the time comes when prices start to go back up along with interest rates.

And homeowners, it’s a great time to pick up a second property for vacation, rental and/or retirement. Don’t wait to buy and find you missed your opportunity. Has anyone seen Chicken Little, lately? He peeks his nasty head out fairly often on T.V.

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This entry was posted on Tuesday, October 24th, 2006 at 11:03 pm and is filed under Home Buyer, Mortgage, Real Estate, Real Estate Tips, Sacramento, Seller. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.