A common issue we see among people today is that they are

unable to take action because they are unsure of the markets.

Most notably we see this phenomenon in the financial and real

estate markets. You know, Bull & Bear Markets, Home Buyer &

Seller Markets. . . Buy Low, Sell High. Here’s the thing: if

you are buying in a seller’s market, you are by definition

competing against all of the other buyers, or following the

herd. And therefore the herd will Buy High and Sell Low. In

the current market, we see two general situational

opportunities.

First is somewhat obvious. That is, people who want to buy

their first home actually can do it in a buyer’s market.

Clearly there are issues with qualifying for the cost and

affording the home (qualifying and affording being related but

very distinct from each other). For those who can buy now and

do, chances are they will be buying low. Why? Because the herd

will not be buying.

Keep in mind that although there has been a significant

contraction in the availability of credit (mortgages), for

those who can qualify the cost and rates of mortgages is still

relatively and historically low. We just got spoiled over the

past few years with ultra low rates, payments and qualifying

guidelines. Change is always disruptive and this is a

significant part of why there are opportunities in the current

market. Once the mortgage and credit issues settle down,

guess what, the herd will start moving (and less green grass

for those participating in the herd).

The other opportunity is for current home owners who do want

to “trade up”. Again limiting this to those people who have

the financial wherewithal, this might be called the sell-low

and buy-(relatively)-lower strategy. Let’s say you could have

sold your home for $930,000 a year ago (the median price in

Marin in February 2007). But the house that you would have

wanted to buy after selling was $1.4 million, and from your

point of view, out of reach. Today you could sell your home

for $830,000. If the move-up property came down proportionally

to $1.25M, the increased benefit of transacting now versus a

year ago is $50,000. But we also know that various price

ranges behave differently. So it’s quite possible (if not

likely) that the move-up property has come down in price

greater than the median. Most people will not take action at

this time – herd.

If you own your home, it is more than just an investment. You

make lifestyle choices that impact where you live, a trade-off

in where you spend or save your money, tax implications, where

you kids go to school and convenience. And it is an asset. To

take action on buying & selling when everyone else is doing

the opposite is unnerving to say the least. Clearly this is

not for the fainthearted.

So how do you take advantage if you think this market is an

opportunity for you? Get good, competent, expert help. Discuss

your options with your mortgage advisor, financial advisor,

tax advisor and Realtor. These experts can help you know what

you can qualify for, make an assessment of the affordability,

review the income tax implications and help you assess the

value of the home you are buying.