Why buy a home? Advantages and Disadvantages of Homeownership

Why buy a home? A chief economist from the National Association of Home Builders discusses why it is still a good idea to buy a home, even after the first time home buyer credit has expired.

 

Buyer's Market vs Investor's Market

The Mass Media and Naples realtors have been screaming about Naples, as well as Florida as a whole, being a buyer's market.

THE ADS SAY:"NOW IS THE TIME TO BUY!"

And who can argue? Home prices in Naples have gone down more than 50% off construction cost.

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The problem for ordinary Naples home buyers becomes the fact that Naples investors came out of their hiding places with all their stashed cash to pounce of foreclosures. That might seem like a good thing for the market, however, cash wielding investors negotiate much lower prices to due the immidiate nature of the purchase, thus lowering the prices further. To add to the problem, eager investors take over bids that would normally go to good Naples homebuyers, who would finance the property and use it as as a primary residence.

If anyone has ever worked with a Naples real estate agent and tried to put in a bid on a reasonably priced Naples property, they would have discovered that it take 3-4 offers to get one accepted by the bank. Banks want NOW and they want CASH. They will take a lower bid in cash over a higher one with financing contingency. That makes some cash investors quite unrealistic.
I've had people call me with the following words:
"I have cash and I'd like to offer "here goes an offer that is 50% less than asking price" on a property located 123 Main Street, Naples FL".

Some first time primary residence home buyers have gotten the impression that cash will do miracles. However they are wrong- cash only goes so far. That's why it's pretty important to have an experienced Naples agent who has worked on Naples foreclosures and Naples short sales, negotiated a few of those and knows where the breaking point for a one or another seller would be . Also this changing market requires us, Naples realtors, to adjust accordingly and FAST. How many realtors have met who still don't know how to use internet well, who fumble with Facebook, sign everything in person, have only paper copies of documents?

Getting back to the Naples investors issue, the problem is they don't let normal hard working buyers get a chance at buying a good property. They win. Every time. You work with a client, you put in 2,3,4 bids in and NOTHING. Then the homebuyer finally agrees to start bidding higher than the asking price, like you've been trying to coach him/her. And that's how you get a contract accepted. A Calculated risk of paying higher price over actually getting the house.

I see several scenarios that will happen after the investors have bought up all the possibly Naples inventory.

They start selling it! At a higher price! Market value starts going up: good for the Naples market and Naples homeowners , bad for the average Naples homebuyer.

Or we see another inventory rise, which coupled with a new foreclosure wave will lower the Naples prices to where we have them now.

Either way,
what an average Naples homebuyer should get out of is this:
Buy and buy now! It WILL be hard to actually get a contract on a good Naples home, unless you're willing to be over the asking price. However, it's well worth.
It's like the stock market and the Naples Homes stock has been upgrade to "BUY".

What a Naples investor should get out of this:
Get your money out and cash in on the greatest feeding frenzy there has been in a long time.

What's come down is bound to come back up!
So arm yourself with a good Naples realtor, and start shooting!

FYI: Naples Home StatisticsNumber of Naples homes bought in cash: 5,135Number of Naples homes financed with 20% down: 2,125