The Real Estate Buying Zone

The V Tool

The V Tool

If a real estate opportunity was knocking, would you know it and would you open the door? In real estate, everyone is always trying to time their purchase to what they feel is the “Bottom of the market.” The problem with this theory is you don’t know you have hit the bottom till you are already on your way up. In a recent seminar I attended, the gentleman who was speaking is involved in doing real estate statistical analysis in Arizona. One of the points he made that really made sense to me is that prices going back up is the last sign we see that we have hit the bottom. There are many other market indicators that show we have hit a bottom before we begin to see house values raise.

In my 30 years of real estate experience, I have to tell you that I have never seen a better opportunity to buy real estate than right now. I really don’t expect you to take my word for it, though. Jim Weichert, owner and founder of WEICHERT, REALTORS® came up with a tool called the “V TOOL.” As you can see from the graphic, the V Tool has two lines, one indicating home prices and one indicating interest rates. To help put things into perspective, place a dot on the Price line where you think home prices were in 2005. Now put a dot on the Rate line also indicating where you think interest rates were in 2005. You will more than likely have a dot in the “High” area along the Price line and maybe Mid-Range or a little under on the “Rate” line. Now do the same things for prices and rates today. I believe you will end up with both dots pretty close to where the “V” comes together at the bottom. If you draw a circle around this area, we call this the “BUYING ZONE.”

Now take a minute and think into the future and put dots where you think prices and interest rates will be a year from now, maybe even 5 years from now. Is there any reason to believe that there will ever be a better buying opportunity than now?

In Arizona, we are currently seeing the inventory of available homes coming down. We are also seeing multiple offers on homes that are extremely well priced. Some of the outlying areas like Queen Creek, Florence, Maricopa, and cities on the west side of Phoenix are seeing the most activity and the best prices. Other areas of the Phoenix valley are seeing prices we have not seen in years. Homes are affordable again and prices are also right for investors to buy these homes and watch them appreciate.

So I ask the question again, do you hear opportunity knocking and are you ready to answer the knock? Wheather you are a first time homebuyer, a move up buyer or an investor, I hope you will take advantage of this market and buy IN THE ZONE.

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