With favorable prices and extensive choices the norm, house hunting in 2008 should be good for most first-timers.

The fact is, mortgage loans up to the conforming limit of $417,000 are plentiful. That should be sufficient for most first time homebuyers, except those in the highest cost housing markets. At the same time, anticipation of a slightly slower economy has reduced long-term interest rates a bit and helped send mortgage rates to near their lows for the year.  All in all, 2008 is shaping up to be a year in which shopping for a first home should be more fun.  No longer will buyers be pressured to make an instantaneous decision for fear another buyer will snatch the home away, as they have been all too frequently in recent years. Careful deliberation before making a purchase offer will no longer be penalized.  In fact, if you are looking for an existing home, the large number of properties for sale may even seem overwhelming. Look to your Choice Real Estate® Agent to help you establish your priorities so you can narrow the homes you will be viewing to a manageable number.  Most sellers these days are aware of the market realities and are prepared to negotiate. Many will already be offering incentives, such as closing cost help and rate buy-downs.  Don’t hesitate to ask for something more practical than the Caribbean vacation they may be dangling at buyers.  And should you run into a seller who is stubborn (there are a few still out there who haven’t gotten the message), you can keep looking, firm in the knowledge that there will be others who are more agreeable. Newly constructed homes can present a terrific opportunity.  Builders have cut prices to the bone and are offering a multitude of free upgrades and other incentives. There are some significant risks to be aware of here, though.  The number one danger is the potential bankruptcy of the builder. Typically, small local and regional builders have presented greater risk than the national builders, but this is not necessarily the case today. Several of the corporate giants are in financial difficulty.  We can help you assess the risks and rewards in this area of the market.  Condos have been a popular choice for many first-time homebuyers who are not ready for the time commitment required of a single-family home or who are loath to give up the convenience or life style of apartment living. That is one of the reasons that condo sales enjoyed a run of steady sales growth.  But there are risks here as well.  Builders jumped into this segment of the market, and many parts of the country have large inventories of unsold units that could depress prices for some time.  Also, be cautious about projects where rental units are a high proportion. While we are not likely to soon return to the overheated housing markets that made house hunting a nightmare for so many novice buyers, current conditions will not last forever.  Forecasters are split over whether sales will rebound mid-2008 or will take a little longer to turn up, but that will happen eventually. That will happen sooner in markets where the local economy is strong. The question most first-time buyers want to know is: “Is this as low as home prices will go?” Close to it in some markets, we think. Some areas that had declines are ticking up. Others experienced minimal or no price declines during this downturn. The exact bottom point of the market will take place at different times in different markets and the Washington, D.C. area and Baltimore markets are particularly resilient.

In most cases, a first-time buyer in 2008 will have caught a market that is more favorable in terms of price and selection than it was a year or two ago.  And as the market recovers, five years from now the home purchased in 2008 is likely to be worth more.
© 2007, Real Estate Information Services, Capitol Assets, Choice Real Estate, Inc. & Choice Real Estate of VA, Inc., & Choice Finance®