Possibly Buying a Home in Scottsdale

On Friday I showed one of my short sale listings to an unrepresented buyer that had called after searching MLS online.  This buyer informed me that he has been watching prices in the area and could tell this home was at a very good price.  After looking over the home, he asked the inevitable question:  When will prices stop falling?  -or maybe it was-  Have we reached the bottom of the market yet?

My answer to that has been the same for a while now:  We’ll know when the bottom was, because we’ll look back 6 months ago, and realize prices are higher today than they were then.

For most of my clients that are on the fence about buying, they nearly unanimously say they would be willing to pay a little bit more tomorrow, rather than find out they paid “too much” today.  Of course, it’s not quite that easy, and I’d like to make a bit of an exaggerated example.

Let’s say you are considering purchasing my listing for $450,000.  You are closely following the market, and you recognize this is indeed a watershed price.  But you don’t buy it, because you are worried that even as low as $450,000 seems for a large home in North Scottsdale, with stunning views, a very nice pool, travertine flooring, granite counters, and everything else you expect in an upscale home, the value of that home just might fall even lower.  So you pass, and you wait.  At the same time, let’s imagine that $450,000 is your absolute ceiling such that if prices go up, you won’t be able to afford a similar home in this neighborhood ever again. 

Meanwhile, a savvy investor does buy the home for $450,000, makes a few cosmetic changes and then re-lists it in 6 months for $500,000.  Six months from now, we find that we were indeed at the bottom of the market on April 1, 2008. 

The home you wanted, the one that would have fit your needs perfectly, is now unattainable.  You are priced out of the market.  You can’t believe you let it slip away. How do you feel?  Would you feel worse, knowing you let your dream home slip away, or worse knowing you paid too much for your dream home?

Will this be you?  It might.  Then again, it probably won’t be.  It is, after all, an exaggerated example.  However, I do think it will happen to someone.  Just probably not you.  It’s likely, that when the market does bottom out, there will be some extremely good deals (not many, but some) that are lower than the general bottom of the market.  Deals that were made somewhat irrationally, because of the seller’s fear no deal would happen otherwise.  And it’s unlikely you’ll know about those deals, because you were on the sidelines, waiting for news that the market had turned upward.

Should you buy my listing for $450,000 in North Scottsdale?  Don’t buy it because I’m telling you it’s a good deal (even though I think it is).  Buy it because it’s the right home for you, at a price that is now attainable, and 5 years from now, whether the market continues to decline, levels out, or sky rockets to the stratosphere, you’ll have been happy to have lived in your dream home for 5 great years, making memories that will last a lifetime.  Because that’s what a home is: a place the average person lives in for 5 years, making memories.

The unrepresented buyer from Friday is married.  His wife was with him, and they told me they were looking at this home because they are going to be starting a family.  They have plans for making some very special memories in whatever home they buy.  Their price ceiling is $450,000.  Should he buy my listing?  I don’t know.  How’s that for some solid, expert advice?

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