Real estate is a funny “game”. When prices are rising, everyone wants to buy but when prices are declining, buyers tend to hold back.

Folks, there is a reason it is called a buyer’s market. The market is  in your favor! A buyer’s market means that prices and terms are to  your benefit. A buyer’s market is the time for buyers to buy.

Due to the large inventory of homes, prices have become more competitive and, therefore, more affordable for buyers. Location is still a key factor when purchasing a home; some areas are over valued and will remain so because of the ageless rule: Supply and Demand. Prices may be fairly priced in one area, under valued in another neighborhood and still slightly over valued in yet another.

Currently, according to National City Corporation, the home prices in Calvert County are fairly priced. In fact, most of housing in the nation is now either fairly priced or slightly under value. In 2008, home prices declined by only 3% in Calvert County with most homes selling close to asking price (within 5%). This demonstrates that homes are now selling for what the market will bear and what buyers can afford.

I previously stated that “terms” are in your favor and that is true. Although there is a credit crunch in the mortgage industry, home loans are still being offered at affordable rates.

 
Conventional loan guidelines have tightened up making it harder for those with less than A1 credit (FICO score of 700+) to obtain loans. Many lenders are requiring higher down payments than a few years ago. Mortgage lenders have gone back to old-fashioned guidelines: good credit history and savings ability. For the strong borrower, these factors are not a hindrance.

For those with less than a 700 FICO score and with less than 20% down, there is still a lender that is willing to extend credit to those seeking home-ownership. That lender is FHA (Federal Housing Authority).

FHA offers loans requiring only 3% down with very competitive interest rates. FHA credit guidelines have not changed and are more flexible than most conventional mortgage loans allowing higher debt ratios and less than perfect credit. Even those with a bankruptcy in their background may find they can qualify for an FHA loan. In addition, FHA has temporarily raised its loan limits for Calvert County to $729,740. Unless Congress votes to make the loan limit permanent, it will revert back to its previous limit of $362,790 on  December 31, 2008. That is a lot of buying power to lose.

Markets all over the nation are seeing an increase in sales and mortgage loan applications have increased steadily for the month of July. These are indicators that the housing market is making a shift.

I doubt that the “Glory Days of 2005 and 2006” are on the horizon, but the market will shift causing buyers to be in a less advantageous position. If homeownership is something that you have been considering, contact an FHA approved lender to determine your purchasing capability.