By Tim Gaynor (Reuters)
If you believe the media hype, there are millions of homes for sale in America and not a buyer in sight. But one person's dead market is another's buying opportunity.
In the Phoenix suburbs, a five-bedroom home with a large yard and swimming pool attracted a handful of prospective buyers on a recent weekend afternoon, lured by a reduced price tag and desert mountain views.
As he wandered out to the pool with his wife, Elliott Farber voiced the cautious optimism of someone who has watched the market fall and thinks it just might be time to jump in.
"I hope. Maybe. Fingers crossed. Who knows? It seems to be a decent time to buy, at least from what we can gather, in terms of home prices dropping," said Farber, who just relocated to Arizona from Boston.
Training consultant Mike Forrester and his wife also toured the spacious home, admiring the hardwood floors, fireplace and vaulted ceilings. The asking price has been reduced to $998,000 from $1,095,000.
Forrester isn't sure prices have hit bottom yet and said a decision to buy isn't just about money.
"You have to be a savvy shopper. I think the market hasn't bottomed out yet," he said. "At the same time, there's some (price) threshold … where you have people who just want what they want."
While sales of existing and new homes continue to fall across the United States and the credit crisis makes mortgages harder to get than they used to be, tumbling prices have begun to lure a few credit-worthy bargain-hunters into the market.
Southern California home sales soared nearly 65 percent in September from a year earlier as buyers seized on the region's glut of foreclosures and depressed real estate prices, according to a report released on Monday by MDA DataQuick.
IMPOSSIBLE TO TIME
Mithun Vora, 28, and his wife are among those who took the leap in September, buying a seven-year-old home in northern California for $630,000. Tired of renting, they felt it was folly to risk missing a house just because they were trying to time the bottom of the market perfectly.
Vora said it was like "trying to catch the last compartment of the last train — you can never get the timing right."
"Prices are lower than they were two or three years ago," he said. "So it was a good price for a good house."
Prices of existing homes in the United States fell by a record 9.5 percent in August as sales slowed, according to the National Association of Realtors.
And while millions of homes still sit unwanted on the market, inventories of unsold homes shrank — a development that will help the market as long as the credit crisis does not cause mortgage lending to dry up.
Vora said he and his wife looked at about 100 houses before buying and considered foreclosures and short sales to get the best possible bargain. And while they got the house for $15,000 below what the seller was asking, Vora said there was plenty of competition, including several other bids.
The Indian-born engineer did get a close-up view of the credit crisis that has paralyzed global financial markets. Despite having solid jobs, perfect credit scores and no debt, Vora and his wife struggled to get a mortgage and ended up with a higher interest rate than they would have liked.
"There was no reason for them to refuse us," he said. "But one came back and said they don't have any money to lend out."
While borrowing is harder, Marc Charney, president and owner of CharneyRealEstate.com, said it is a great time to buy.
"Now more than ever the buyers are in the driver's seat," said Charney. The high pressure of the housing boom is long gone, he said, so buyers can be discerning.
And while Charney believes prices will fall further, he cautions against trying to time the market.
"There is no point in waiting on the sidelines," he said. "You should be looking. It's okay to take four months, six months, to buy a home."
'FLY IN AND TAKE ADVANTAGE'
Mark and Carol Dawson are doing just that.
House hunting in an upscale neighborhood of Glendale, California, just north of Los Angeles, the Dawsons are ready to "trade up" from their current home or buy an investment property as soon as they spot a good deal.
Recalling how he and his wife missed out on bargains during Southern California's housing slump in the 1990s because they lacked savings, Dawson is keen to take advantage of the latest fall in prices — and he has already pre-qualified for a loan.
The couple has been socking away cash "so we're liquid enough so that if the market does dip, we can fly in and take advantage of that," Dawson said.
Back at the open house in Arizona, realtor Jil Gazley-Starkey showed two more groups of people through, hoping one of them would be a buyer. Not a bad turnout, she said, but still a long way from the boom years.
"If this was 2005, there probably would have been 15 people and somebody would probably have written an offer," she said.
