Good News for Qualified Buyers

Written by: Phoebe Chongchua / Realty Times

A recent survey released by Trulia, a real estate search engine, community forum center, and reporter of market trends and data, found that a "crisis of confidence" exists among key groups of U.S. homebuyers.

Not surprisingly, much of the lack of confidence in the real estate market stems from the mortgage fallout, the instability of the real estate market, uncertainty of economic times, and the upcoming election.

According to the survey, which included about 1,500 respondents, 70 percent of non-homeowners have no plans to purchase a home in the next 12 months and nearly half in the 18 to 34 age group say the reason is because it's too costly. While those in the 35 to 44 age group are concerned that they might not be able to qualify for a home loan. The survey also found that only 12 percent of the non-homeowner respondents said they expect to buy a home in the next 12 months.

In a press statement, Pete Flint, CEO of Trulia said, "This combination of the mortgage and Wall Street crisis is tantamount to a one-two punch that has knocked the wind out of the American home buying public. The question is how quickly the American psyche will heal. Despite this short term pain, half of all Americans believe that home ownership is still the cornerstone of the American dream. It is the dream of homeownership that—in the end—may help the market rebound."

If you're a prospective buyer, who sees now as an opportune time to buy, then having fewer buyers to compete with puts you in a very good market position. Remember the days of bidding wars?

If you're interested in purchasing a home now, especially because of fewer buyers in the market, this may be the ideal time. Working with experts in the industry to help you qualify for the best-suited loan, appropriate size house and style, in a neighborhood that shows promise of increasing value over time - may allow you to get into the perfect property.

"There are some amazing opportunities out there right now and if you are in a good financial position and you can get the loan that you need—with the banks just getting the infusion of cash this week which will hopefully be used to free up the credit market a little bit—now is a great time," says Ken Shuman, head of communications for Trulia.

He points out that the fourth quarter is traditionally a slow time for buying homes but it can be a good time for serious buyers to get a head start. Shuman says getting pre-approved is critical even if you have done it in the past.

"Even if you are making the same amount of money and for instance last year you qualified for a mortgage of $600,000, this year you might only qualify for a mortgage of $500,000—even if your salary hasn't changed and your credit score hasn't changed," says Shuman.

Shuman also points out that even in these difficult times, the effort to get into the housing market is worth it and that's supported by the research found in their survey.

The survey found that half of the homeowner respondents believe that their home is a great long-term investment despite the turbulence in the marketplace. Some, of course, still have anxiety over the current conditions. The survey also revealed that more than half of all non-homeowners believe homeownership is a central point in achieving their own personal "American Dream".

Among prospective homebuyers the key areas of concern that influence them when deciding to purchase a home are: getting a good price (35%); crime rates (15%), making a good investment (15%).

According to the survey, featured amenities ranked higher than the quality of local school systems (14% versus 11%). Traffic commute ranked last (8%). A gender difference occurs as well. The survey found that, "Men are more concerned with the crime and sound investment factors, whereas women are more concerned with amenities and quality of schools."

As the adage goes, behind every cloud is a silver lining; so, if you're a serious buyer, this may be the market you've been waiting for.

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