By Jerry Reeves, from the Tigard Times: Tualatin developer/builder Jerry Reeves is the president of J.C. Reeves Corporation. In three decades he has built more than 2,000 premium homes and created many quality neighborhoods.
Waiting for a “better deal?” Be careful. You can wait yourself right out of the opportunity of a lifetime.
These are challenging times for everyone. But concealed within these challenges are tremendous opportunities – if people have the wisdom to see them and the will and self-confidence to take action rather than sit on the sidelines.
Contrary to what you may have heard in the media, plenty of money is available for homebuyers, sometimes at astounding interest rates. This is a great opportunity for people to see what is on the market, study the price ranges, and discover what interest rates are available.
Beginning this weekend, April 18, and running for two weeks, the Home Builders Association of Metropolitan Portland (HBA) is sponsoring an event to showcase a wide range of new homes available for immediate move in. These run the gamut from nice family homes to the finest luxury homes.
Called The Ultimate Open House, this event features homes by many of the Northwest’s finest builders, in cities and neighborhoods throughout the metro area.
Why act now? While some are playing the waiting game – waiting to see if prices drop even further – others are seeing the handwriting on the wall and acting now to lock in quality homes at great interest rates.
The real estate market has always seen ebbs and flows in pricing. This is certainly the largest ebb in modern times, but it still follows the same pattern. This market is quick to adjust in value and pricing, and we have seen the largest adjustments we can expect.
While older, cheaper homes and rental properties may still fluctuate, quality new homes and particularly the high-end new luxury homes are far more stable. The low-end builders have slashed prices, gone into bankruptcy and had fire sales. But as is always the case, the cream still floats on the top. Premium homes have retained their value, and the finest builders have not declared bankruptcy, nor have they been forced to slash prices.
The real issue homebuyers must consider is not price, but interest rates. It is obvious interest rates are not going down. They are creeping up, particularly on the high-dollar jumbo loans needed to buy premium luxury homes.
What does this mean to you, the prospective homebuyer? It means while prices have stabilized, interest rates have not. And as money gets tighter and harder to borrow, don’t expect interest rates to fail to reflect this increased demand-to-supply ratio.
Buying at current interest rates is like taking several hundred thousand dollars off the price of your new home. Postponing your purchase in this market just doesn’t make sense. Further delay may cost you money, and in the worst-case scenario could put your dream home – or even the dream of owning a nice home – out of reach.
And while the speculative bubble may have burst, the core values of buying your own property remain: Investment, tax advantages, inflation protection, security, and ultimately the ability to be your own landlord and control the destiny of your life and ensure the highest possible standard of living for yourself and your family.
This may be the perfect time to move into an area offering the quality of life most important to you.
There is another factor buyers must take into consideration: Construction of new luxury homes has dropped to a standstill. This means that the market for move-in ready homes is shrinking, and high-end new homes will remain scarce for up to two years.
But buying new is only one option. There is another option – another opportunity possible now only because of the current depression. This is a great time to build your dream home. Lots – once such a scarce commodity in our region where land availability and prices are artificially manipulated by the urban growth boundary – now are available at a level not seen in decades. And the same factor driving a resurgence in new-home sales, low interest rates, may allow you to build more home than you ever dreamed possible – on a lot once out of your reach.
Whatever your plans, goals and dreams, or even if you are just curious to see what is still on the market, the Home Builders’ Association Ultimate Open House is a tremendous opportunity. I encourage you all to attend, and be sure to bring the whole family. After all, for many of us, family is what owning a home is all about.
