East Bridgewater Realtor...Tony Lonergan

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Housing: Best time to buy in four years

Home values have declined across the country, giving homebuyers the best buys they've had since 2004.

NEW YORK (CNNMoney.com) -- It may be the best time to buy a house in more than four years.

Home prices have dropped so quickly and so far that valuations - the difference between what a home should cost and its actual price - are the lowest they've been since 2004, according to a report.

The Cleveland-based bank National City Corp. (NCC, Fortune 500), together with financial analysis firm Global Insight, revealed Tuesday that more than 88% of the 330 housing markets surveyed showed price declines and improved affordability during the last three months of 2007.

"Housing valuations are almost back to long-term norms," said National City's chief economist, Richard DeKaser. He called current affordability "the best in the past four years."

But DeKaser cautioned that home prices could fall even further.

"This isn't to say home price declines are over," he said. "We could move below historic norms. By the end of 2008, housing markets could be broadly under valued."

Cape on wooded lot

Falling House Prices Force Tighter Lending Standards

"Excluding food and gas, January retail sales were almost flat."

The rapid decline in house prices in many markets is having a predictable effect on lenders: they are tightening standards. Many major lenders are now requiring 10 percent down payments (not borrowed) in markets with rapidly declining house prices. The rationale is obvious; falling house prices will lead homebuyers with small down payments to have zero or negative equity in their homes. Since having no equity in a home hugely increases the default risk, it makes sense for lenders to impose rules that make this situation less likely.

Of course tighter lending standards will be yet another factor putting downward pressure on prices in troubled markets. Requiring 10 percent down payments will exclude many potential homebuyers from the market, and also reduce the amount that other homebuyers are able to pay for a house.

Just as the bubble’s expansion created a dynamic of easy credit and exaggerated appraisals that were self-reinforcing, the bubble’s collapse creates a self-reinforcing pattern on the negative side. The big risk is that the market will actually overshoot on the negative side, with prices dropping lower than their long-term trend level.

We are seeing more evidence of the impact of falling house prices on consumer spending. This was clearly the major factor behind weak December and January retail sales.

On Monday, USA Today reported the results of a survey by Zoomerang showing that two out of three homeowners planning home improvements this year were putting them off, and 11 percent were canceling them altogether. (The 11 percent are presumably part of the two-thirds.) This is another predictable effect of declining home equity. This will appear in both residential investment (renovation and actual building) and consumption (new appliances like stoves and refrigerators).

Where do buyers FIND their next home?

The reach of the internet in terms of real estate marketing recently extended beyond that of any other medium. Quite simply, online marketing is the best way to reach buyers, and this is truer every day. 2005 marked the first time when more buyers used the Internet as an information source than used newspapers. When buyers begin their home searches, they typically start with a search engine such as Yahoo! or Google. I can make your home easy to find on the Internet. All my listings are advertised on the following websites:

Realtor.com, MyBridgewater.com,Googlebase.com, Oodle.com, Trulia.com, Zillow.com, LiveDeal.com, CityCribs.com, Vast.com, Edgeio.com, PropSmart.com, RealEstateAdvisor.com, TheHouseingPages.com, MyWestBridgewater.com, VideoHomes.com, SilvaRe.com, TonyLonergan.com, MyEastBridgewater.com, House.com, PropBot.com, Homescape.com, USCondoExchange.com, ForSale.com, Hotpads.com, Craigslist.com and more sites are added weekly.

What are buyers LOOKING for?

Photographs. 97% of buyers find property photos at least somewhat useful, and photos are considered the most valuable online feature. Buyers must be able to visualize themselves in your home, which is why I provide high quality digital photographs on my website.

Detailed Property Information. Just as is the case with photos, 97% of buyers find detailed property information at least somewhat useful. Of course – who wouldn’t want to gather as much information as possible before purchasing a home? I am able to enter far more detailed information about your home, giving your potential buyers enough to pique their interest.

Virtual Tours. The virtual tour captures their imagination as to how they would decorate the room. It also helps them remember the property and I make it easy for them to share the experience by letting them email the virtual tour to friends and family, enlarging the viewing audience of your home.

Whether you are buying or selling a home, need a home valuation or have questions about selling your home on your own, feel free to call or email me with any questions you may have.

Sincerely,

Tony Lonergan

Silva Real Estate

412 Bedford Street, East Bridgewater, MA 02333

Cell: 617-515-6165

Office: 508-378-8890 Fax: 508-378-8891

eFax: 641-453-0193

Email: tony@MyEastBridgewater.com