San Francisco Bay Area Real Estate - Buy Now Or Wait It Out?

[ghoeyw...@yahoo.com]

Probably the most popular real estate debate today centers around the
San Francisco Bay Area home sales market and whether or not now is a
good time to buy a home. With recent changes in the market, most
buyers are sitting on the sidelines trying to weigh the pros and cons
of jumping in to seemingly unpredictable and turbulent waters. While
both home prices and home sales are falling nationwide, the market in
the San Francisco Bay Area is a bit of an anomaly. According to
DataQuick Information Systems, a real estate research firm, though
fewer properties are selling in the Bay Area, and real estate
inventories are growing, overall home prices are still going through
the roof. It has been reported by news media that the median price for
an existing single family home rose to a record $720,000 in April of
2007 though April's sales count was the lowest in 12 years. So what is
driving the market, and is now a good time to buy?
The Wealth FactorThe Bay Area housing market is significantly impacted
by the level of wealth shared by the people buying homes there right
now. According to the California Association of Realtors, higher-
priced markets have been performing better than lower-priced or
"starter home" areas in terms of the strength of both sales and price.
On the other end of the spectrum, recent sub-prime mortgage market
woes have stifled the ability of people with little money to put down,
and those who have poor or marginal credit; to qualify for a home
loan. This segment is being squeezed out of the market by tougher
lending requirements. With fewer people in the starter home
demographic able to qualify for a home, both home prices and home
sales in lower-priced areas have been stagnant or declining. Whether
you are looking for a starter home, or you are looking to move up; if
you are trying to determine whether or not now is the right time to
buy, it really all depends on 1.) your credit, 2.) your overall
ability to qualify for a loan, and 3.) your ability to come in with a
significant down-payment.
If You Have a Weak Credit Rating, Clean Up Your CreditIn recent years,
there really was a loan out there for almost everyone--though, if a
buyer's credit was less than perfect it could really become costly.
Today, however, the days of no down-payment loans are quietly fading
into the distance even for the highly credit worthy. So, if your
credit report shows excessive late payments, collection accounts,
charge-offs or any other derogatory items, now would be a good time to
put "homeownership" on the back burner and move "cleaning up your
credit" to the forefront. That way, when a solid loan program is
available for you, you will be able to enter into homeownership from a
position of financial strength.
Taking Advantage of the Buyers MarketIf your credit is strong, you
have money to put down on a home, your mortgage payments are
manageable for you, and you plan to stay put for more than 5 year; by
all means throw your hat into the ring'-especially if you are looking
for a starter home in a moderately priced area. While you probably
won't walk away with a "steal" the odds are in your favor that you
will be able to purchase a home at a great price. Don't be overly
concerned about whether or not home prices will slip further in the
coming months. If you are planning to stay put for a little while, it
really doesn't matter.
Give Up on Trying to Time the MarketWhat many people don't understand
is that it is virtually impossible to "time the market." Over time,
home prices in the San Francisco Bay Area have risen significantly.
So, while the San Francisco Bay Area is in a unique type of slump
consisting of slowing sales and rising prices, whether or not now is
the right time to buy, depends on your individual
situation.
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