What a great market to be in as a Buyer today! The wealth of our nation is being redistributed at this very moment. The question is whether you will participate in the movement or whether you will sit back and watch others, waiting for your perfect opportunity. It doesn’t work that way. By the time you identify your perfect opportunity, it will be too late.

Why is this a good market? The single most important factor is the interest rates. Interest rates are at all-time lows. On a $100,000 mortgage, if your interest rate goes up just 1%, your payment goes up by approximately $65. That’s the equivalent of adding $10,000 to the price of the house for every !00,000 of mortgage. So looking at a $240,000 home with a $200,000 mortgage, if you wait and let the interest rate go up by 2%, you are, in effect, paying $280,000 for that same house.

The second factor is the reduced price of homes. The Bitterroot Valley is experiencing about the same pricing as the 2004-2005 era. Will prices go down more? It’s possible. As long as we have so many foreclosures and short sales, it’s hard telling what will happen to the market, but how will you know when they are as low as they’re going to go? You won’t until they start going back up. Historically, there has always been peaks and dips in the market. The time to buy is when you find the right property and it makes sense, whether it’s because it fits your lifestyle and it’s what you want, or whether the numbers pencil out for an investment. If prices go down a little more but you can’t find what you want and need or if the interest rates have gone up as we’ve just discussed or if the property has been trashed because it had gone into foreclosure or any number of “ifs,” are you coming out ahead for waiting?

The third factor that enters into making this a good market to buy in is that there are many, many people who are afraid to make a decision, just like we just talked about in the last paragraph. Because so many others are afraid to make a decision, it opens up the inventory and the negotiation avenues for those that are able to make decisions.

Don’t look back and say, “If only I had bought back in 2011. . . Boy, the people who bought then were really lucky; I really missed the boat.

These days, more people are hoping to stay afloat by using credit cards to pay their day-to-day expenses. At one time excessive credit card debt was generally due to excessive spending, oftentimes for luxuries and non-essentials. Today, more people than ever are putting their weekly groceries on their credit card.

The very reason they are using the credit cards is creating the problem. If you don’t have money to pay for the necessities, you don’t have money to pay the credit card off each month. The exorbitant interest and fees charged by the credit card companies make it nearly impossible to pay them off once they start building up. Soon, people find themselves drowning in debt.

In May of this year, more than 106,000 people filed for bankruptcy. That’s up 40% from a year ago May. A good number of these people owned their homes but will soon be losing them. As long as this trend continues, the number of foreclosures will increase.

Fewer U.S. homebuyers are interested in foreclosed properties than they were a year ago, according to a survey conducted for Trulia.com and RealtyTrac.

About 45 percent of U.S. adults age 18 say they are at least somewhat likely to consider purchasing a foreclosed home, down from 55 percent of people surveyed in May 2009.

Most home owners – 98 percent – expect to pay less for a foreclosure, but 36 percent expect a discount of 50 percent or more. Only 18 percent say they would be satisfied with a discount of less than 25 percent.

 Some 92 percent of potential buyers were realistic about the likelihood that a foreclosed property will need improvements, but 65 percent wanted to spend less than 20 percent of the purchase price on fixing the place up.

Among U.S. adults who say they are at least somewhat likely to purchase a foreclosed home, 62 percent said they would use the property for their primary residence, 19 percent said they would use it as a rental investment, 8 percent said they would use it as a second home or vacation home, and 6 percent said they would buy and quickly resell. Source: Trulia.com (05/20/2010)

If this is true, why are the foreclosure sales actually continuing to increase? Foreclosures accounted for more than 30% of total sales in the first quarter of this year. Could this mean more opportunities for those who are left in this arena?

The good new is – and the bad news is – that we do NOT have a nationwide trend in foreclosures! Montana ranks well below most for numbers of foreclosures but is about middle of the road as far as ratios are concerned. Currently there are approximately 396 foreclosures in Montana which doesn’t sound bad for as large of a state as what Montana is.  However, this represents approximately 1 out of every 1099 homes.  Comparatively, you have Nevada who has 1 out of every 92 homes in foreclosure and then you have neighboring South Dakota who has only 1 out of every 25,517 properties in foreclosure.

Flathead County leads the way in numbers with 82 foreclosures. However,  Ravalli County’s 42 foreclosures represents 1 out of every 392 homes whereas Flathead’s ratio, because of its density, represents only 1 out of every 460 units.

For more information concerning foreclosure trends throughout Montana, Contact Us.