Recession Talk and Buyer's Concerns

It has been said that a recession is when my neighbor loses his job and a depression is when I lose mine. Lately one can substitute the word "house" for "job" and probably echo the sentiments of a number of people in the current economy.

Experts seem to be having trouble deciding if we are or will be soon in a recession.

But whether we are or not, talk of recession can make homebuyers weary. So below we are addressing five concerns that buyers might have in this market.

Concern # 1: Bad Market Conditions

Everyone knows the housing market is facing challenges, but what many people may not understand is that homebuilding is a cyclical business. The last housing downturn occurred in the late 1980s and early 1990s. New home sales began recovering in 1992 and continued growing until the next peak in 2005.

Most people have heard the saying "Buy low, sell high." Right now it is a buyer's market -- that means you can get more for your money! You have more choices, more value, more design features, lower interest rates and more loan programs to choose from.

Keep in mind though that the market can change at any time. Waiting could mean missing out on opportunities. We are already seeing an increase in competition for buying homes in the Greater Las Vegas area. Why wait for prices and interest rates to go up when you could be living in the home of your dreams right now?

Concern #2 -- Dropping Home Values

Despite short-term market cycles and fluctuations, long-term home values have increased historically. On average, the value of a home nearly doubles every ten years, according to research from the National Association of REALTORS®. And the Federal Deposit Insurance Corporation reported that between 1978 and 2003, the nationwide House Price Index grew an average of 5% per year.

These statistics are sound reminders that home-buyers should keep their long-term goals in mind. While today's market may not be optimal for investors seeking a quick turnaround profit, it could be an ideal window of opportunity for people seeking a place to live out their lives and build memories, dreams and futures.

In addition, by having so many choices in this market, you can enhance your investment by choosing features that will add re-sale value later. The current market provides opportunities for creating a lot of "sellability" into your home that will not only make it easier to re-sale later, but will make it enjoyable to live in now.

Finally, if you are an investor, this market provides a nice basis for long-term investments with an opportunity to take advantage of tax shelters and a growing rental home market in the meantime. Quick-flip investments are not advised in this market, but the long-term picture is still advantageous for the portfolio.

Concern #3 Selling Current Home

Although selling a home can be difficult in today's market, there are many things you can do to help your home stand out from the rest. Staging a home is a great place to start. From strategically arranging furniture to adding warm and stylish accents, staging is all about making the home feel inviting an allowing others to imagine living there.

Home inspections are also important. Addressing problems before putting a home on the market can add value way beyond the cost of the inspection and the fixes.

If you want to wait out the market and sell later, turning your home into a rental might be the best way to go. This doesn't work for all properties, but most homeowners are not aware of the potential their homes have to rent or the tax advantages of doing so. Finding the right tenant is key.

In any case, working with a professional Realtor® who has experience in turning homes into investments can make all the difference. If you want to take advantage of the market by moving into a home more in tune with your dreams, selling your current home doesn't have to be a hindrance.

Concern #4 Negative News Coverage

Homebuyers today are flooded with national economic news that is not necessarily representative of their local market. Every area is different. Even neighborhoods within a given area are different. Las Vegas has been and remains very different from the nation.

Realtors® know local markets and relying upon one with that knowledge can make the difference between a good or bad investment. We know and can educate you in local economies, employment, schools, transportation, amenities and communities.

Concern #5 Making a Bad Investment

If you are currently renting, you should learn about the potential tax benefits of homeownership. Paying rent each month makes no financial investment in your future. Buying a home invests in your future.

There are also many lifestyle benefits drawn from homeownership. When you buy a new home, you're investing in something far more valuable than any stock or bond can offer. You're investing in memories. A home is a place to throw dinner parties, hold game nights and host sleepovers; it is a place to play a game of catch in the backyard or sit on the front porch and watch the neighborhood kids play.

In this market, homeownership is more affordable than it has been in years. First-time buyers may not be able to take advantage of these prices for long. Now is a good time to move from rental to homeownership.

THE DULCIE CRAWFORD GROUP has considerable expertise in the Las Vegas/Henderson real estate market. 2008 is a great year to buy a house in our area. Feel free to contact us if you want to know more about the local market and explore whether it is time to buy, sell or convert a home.

Our thanks to Richmond American Homes as a major source for this article.