How Will the 2007 Real Estate Market behave?

Happy New Year to you and yours. May 2007 bring us a better year. I, personally would like to see more peace and less war, more prosperity and less poverty. However you are probably reading my blog for real estate advice not Beth's personal vision for the world. In 2007 I expect to see continued price drops which means that home prices will continue to fall. I also believe they will fall gradually not drastically. The average home on Long Island has already depreciated 20 to 25% with the higher depreciation rate in the $500,000 and over segment of the market. Sellers are getting very nervous and buyers are sitting on the sidelines feeling very unsure of themselves. What to do, what to do? Let's take a first time buyer with little money for a down payment and a job that pays a decent salary but nothing to write home about. Should you buy now or wait? Let's see.......... A decent 3 bedroom starter home in the Mastic/Shirley area will cost you between $225,000 and $250,000 today. If you were to say hire a really good buyer agent and they could negotiate a $199,000 price for you then your total mortgage payment ( assuming a 6% interest rate) would be approximately $1650 per month. If perhaps you waited a year to buy a similar home and your good buyer's agent negotiated the price down to $189,000 your monthly mortgage payment ( assuming a 7% interest rate) might actually be $1700 per month due to the difference a year would make on the prevailing interest rates. So my best advice to you is to buy a home when you are ready, willing and able. Good deals on desireable homes can come along at any moment but remember "Ya gotta be in it to win it"