Is there a housing bubble where you live? It seems as though housing prices have dropped in many regions, that's for sure. In the past, buyers were forced to engage in bidding wars when trying to purchase a home. Today, it seems there are a dozen houses for each buyer. In fact, the number of houses on the market nationally has gone up by about one million according to recent data from the National Association of Realtors. Jean talks to Money magazine's Steve Gandel for his real estate forecast, as well as his tips for buyers and sellers alike.
Steve's real estate outlook:
It could be a while before housing gets hot again. To many economists, it's unclear whether prices will plummet, level or go back up. In fact, Steve says only half of economists think prices will go down next year.
If you own your house, this won't affect you in a large way, unless you bought your house and expect to live in it on a short-term basis.
Places where economic conditions are quite bad, or where prices have gone up a lot, will be the most affected. For example, San Diego, Las Vegas and much of Florida are expected to take big hits.
If you live in an area where the job market is decent, you won't have to worry quite as much for the long term.
If you're a buyer:
Get your own appraiser. You want to know the exact worth of your potential home.
Know that mortgage brokers are not always on your side. Shop around on your own to get a number of different quotes, then go directly to banks and see what they will offer you.
If you're a seller:
Remove yourself from the psychological pull of your own house. People tend to think their homes are worth more than their actual value. According to Steve, it's not that people can't sell their houses—it's that they can't sell them for the price they want.
Wipe 2005 out of your head, and don't focus on what you could have gotten for the house if you'd sold it last year. All that matters is what it's worth now.
Be careful with renovations—buyers will likely not pay as much as you put into them. If you have extra money to put into your house, shore up the essentials, like the roof, and update landscaping.
Remove knickknacks when showing the house to make it seem more spacious.