For buyers and sellers, the past few months have been schizophrenic.
In 2009, sellers are battling shrinking home values and a constricting pool of available buyers. Buyers are sensing opportunities on home prices and home mortgages -- if they have the credit, job security and ready cash to qualify.
Those in the best shape are homeowners who don't have to sell and homebuyers with good credit, a stash of cash and working knowledge of their mortgage options.
"There are going to be great opportunities out there," says William Poorvu, author of "Creating and Growing Real Estate Wealth" and professor emeritus at Harvard Business School in Boston. The question is: Is it right for you?
"Whether it's Bernie Madoff or your own mortgage broker, at a certain point you have to rely on your own judgment," he says.
Nationwide, home prices fell in 2008, but the exact amount is debatable. The National Association of Realtors, or NAR, puts the figure at 9.5 percent. Another yardstick, S&P/Case-Shiller Home Price Indices, logs the decline at 18.2 percent.
The number of new homes being built is also down. Housing starts, which averaged 1.3 million annually from 2000 to 2003, dropped to 617,000 in 2008, according to Robert Denk, economist for the National Association of Home Builders in Washington, D.C.
You don't have to be a buyer or seller to realize that homes are sitting on the market. The current time between planting that "for sale" sign and accepting an offer is about 9.7 months, according to the NAR. That's down from almost 12 months in 2008, but higher than the industry's historical norms of six to seven months, says NAR Chief Economist Lawrence Yun.
- Some homes are selling
- Buyer opportunities exist
- Housing options abound
- The market fluctuates
- Refi traffic revs up
Some homes are sellingIt's not all doom and gloom. Fred Soule sold his home in Fort Wayne, Ind., after just two weeks. While he got $5,000 less than he'd hoped from the sale of his 4-year-old, three-bedroom house, he broke even when he bought another home across town. Soule negotiated the price on his new home based on what he was getting from his own sale, and the deal made it worth it, he says.
Soule also had a secret weapon -- staging. His sister and brother-in-law, big fans of TV home fix-up shows, coached him on "decluttering" his house and getting it sale-ready. Soule moved out a lot of his nonessentials, cleaned out the garage and even rented a storage unit.
On the buy side, his new purchase -- a never-been-lived-in, bank-owned home -- was originally marketed at $174,000. He paid $150,000.
Jeanette Prose wasn't so lucky. Her 3-year-old, three-bedroom home in Hollister, Mo., was on the market for 16 months, and she finally accepted $15,000 less than her original asking price. It took another three months to close.
But she was also buying, and her seller was willing to negotiate. "We got a good deal, so everybody was happy," she says.