A Fool's Game?

The following editorial was recently published in the Fresno Bee:

'A fool's game'
"I was reading your article, "Fresno Home prices below U.S. average" and saw that Patrick Conner, owner of London Properties, is quoted as saying that prices are below the national average and that we are not in Nebraska.

He is right about one thing: We are not in Nebraska, because if we were, the home prices would be even lower. He should know that ratio of home prices to income levels in the Valley are still too high.

In that same article, Robin Kane, a real estate analyst, is quoted as saying that guessing the bottom is a fool's game. Isn't this the same group of people who said that real estate prices never go down and that it was the time to buy when the market was overinflated?

I think it's a fool's game to listen to a group of people whose vested interests are pushed ahead of the public they claim to properly inform."

-Carlos Montez, Fresno

Mr. Montez, your opinion is appreciated, but we are very aware of the opportunities and affordability of our local market. As of the first of February, the nation's unemployment percentage hit 7.6%. Fresno is slightly higher, and places in the midwest, like Nebraska and Indiana, have counties where that figure is over 15%. Also, in 2002, the valley's housing affordability index (which accounts for the ratio of wages to housing costs) was at 64%. Then, our market did get out of control and by 2006 that figure dropped to 24%. However, with our market correction, and lower housing prices, the Valley's affordability index is back up to 65%. These are just the facts, your call...

La Ventana Community

Are you looking for a home in the Northwest Area? Come by my community at La Ventana off Bullard and Grantland. We have lots of inventory, either foreclosure or new development. I'm extremely familiar with this community as I live in it. My friends at both Granville Homes and Bella Vista keep me updated with the best priced inventory. So come by or call me at 213-2090. I'd love to give you a tour or sell you a house.

Bubble? What Bubble?

If you bought a home 10 years ago you've seen its value increase approximately 130%. In the past two years, the market moved the other direction and the value dropped about 30%. After that decline, the home's value remains nearly twice what you paid for it. That's not exactly a bust. The good news is the abnormal feeding frenzy is over. The balloon has deflated a little but nothing burst. Housing values are stabilizing and lenders have even adopted a novel idea - perhaps people who borrow money should actually be qualified.

Now is the time smart shoppers are making their money. The not-so-smart will wait until the prices have gone back up. They may not have a long wait. Why?

Supply: It's no news that construction of new homes came to a screeching halt two years ago. The valley is still growing. People are still leaving the bay area and southern California to move here, partially because they can still buy twice as much home here for less dollars. Here's an eye opener — the MLS inventory of homes that was going up every month for three years has been going down.

Affordability: With low interest rates and lower prices, more people than ever can afford to buy. Sales have been down. Buyers are waiting in the wings. There is becoming a pent-up demand and the gates are about to bust open.

Momentum: After over two years of retraction the market is changing direction.

Interest: For a short time we are continuing to enjoy abnormally wonderfully low interest rates. It won't last. Never has, never will. Interest has always been cyclical. We were selling houses when mortgages were at 12-15%. I expect before long we will again. As sure as valley temperatures will increase in August, when inflation sets in our Federal Government it will raise rates faster than the thermometer.

Ok, you say now may be the perfect time to buy, but if I sell my current home I'll take a "big loss." I can't afford it. Oh contraire, home values are like the tide in the harbor. When the tide goes out, the level of all the boats drop. In simple terms, that means you can't possibly lose money by selling your home. In fact, it's the opposite. Remember you make money in real estate when you buy it, not when you sell. After your home is sold (at whatever value) you become a cash buyer. If you shop thoughtfully, you'll buy the next bigger, better home for even less.

This market is a chance of a lifetime for sellers. Not only can you now move up, you can lock in lower interest rates and lower taxes for the next 30 years. If you are new to the market and don't already own a home, here is a tip... Buy Now.