Potential Homebuyers May Reap Sweet Surplus Deals (Commentary)

Allow me to let you in on a big secret. Whether you know what I’m about to say or you learn it today, when you are done with this article, you need to take action or at least spread the word. Here it comes…are you ready?

It’s a great time to buy a house!

I’m not speaking with a whisper; I’m yelling it as loud as I can!

Why, you ask? Because there has never been a better time to buy a house and people are just not doing it.

Most people hear what is on the news and read what is in the papers. I do, too. It sounds pretty “doom and gloom,” I agree.

There is some truth to what is being said. The housing market is down nationally. Locally, builders and developers are having a hard time. We have a surplus of new homes that are not selling.

While these facts are unfortunate, it leads to my big secret – it’s a great time to buy a house! Today, you can get a great deal on a house. In many cases, you can get a new house at cost or below cost. Sellers and realtors are working harder than ever to sell homes and buyers are reaping the rewards.

There are two parts to the “so-called” demise of the real estate industry in Northwest Arkansas.

First, as I mentioned, there is the false impression that buying a house in this market is not a good idea.

The media is filled with bad news about real estate both locally and nationally. Then you have popular, nationally syndicated “quasi”-experts that have all kinds of “Mad Money,” and are certainly well diversified, telling people not to buy a house.

These guardians of our decision-making ability need to come in off “The Street” and do a little more homework before offering bad advice.

You don’t have to be a real estate expert, or even financially savvy, to see that now is a great time to buy.

Next, it is important to address the misconception that the mortgage industry is about to implode or the idea that it has become impossible to get a mortgage. This is far from the truth.

Yes, there are many mortgage companies that have closed their doors. These companies put too many of their eggs in the sub-prime basket and now they are paying dearly.

Over the last five or six years, there were countless bad decisions made by mortgage companies. They felt that they were invincible and decided to give mortgage loans to people who couldn’t qualify for a car loan at a “buy here/pay here” lot. There were a lot of stated-income loans and no-document loans that led to a high default rate. To avoid boring you with the mechanics of these types of loans, I will simply say that they represent a small percentage of the total loans originated.

The truth is that people are still getting loans. Even people that need 100 percent financing or have some credit issues are still being approved.

And did I mention that interest rates are extremely attractive? Is this starting to make sense?

Here’s the bottom line. It’s not a good time for some developers who may be sitting on a bunch of empty lots or for builders who have a bunch of empty homes on the ground.  It is a great time for someone to buy a house.

Interest rates are low and appear to be holding steady. Shoppers looking for a home have many options.

Sellers are paying closing costs and making all kinds of concessions to sell homes. And you could potentially get a house at, or below, cost.

There is one more thing that you need to remember. This surplus of available homes is not going to last forever. Once they do start selling, the sweet deals will be gone and the house you may have purchased at a great price should begin to appreciate nicely.

This is a tremendous opportunity for a homebuyer whether you’re moving up, down, buying your first home or an investment property.

And opportunities such as these don’t present themselves often.  Call a loan officer to discuss your options and get pre-qualified. Then get with a real estate agent who can help you find that ideal home and jump on this extraordinary opportunity before it’s gone.
 
(Justin Moore is a vice president and manager of Metropolitan National Bank’s Northwest Arkansas mortgage division. He can be reached by e-mail at [email protected].)