Remember that movie that came out in 1991 that had a younger George Clooney and that guy from Marky Mark and the Funky Bunch? It was a great movie about a boat called the "Andrea Gail" and a group of commercial fisherman that went out for the season to earn a living. The Title of the movie "The Perfect Storm" comes from a weather phenomenon where a strong disturbance associated with a cold front moved along the U.S.-Canadian border through New England pretty much without incident. At the same time, a large high-pressure system was forecast to build over southeast Canada. When a low pressure system along the front moved into the Maritimes southeast of Nova Scotia, it began to intensify due to the cold dry air introduced from the north. These circumstances alone could have created a strong storm, but then, like throwing gasoline on a fire, a dying Hurricane Grace delivered immeasurable tropical energy to create the perfect storm.
Currently we are in the midst of "The Perfect Storm" in the real estate industry. Much like the strong disturbance cold front, we have a down economy. It started a few years ago when our Mortgage industry had huge fallout and many banks failed. We are currently in a time where unemployment is high and many people have been unable to keep up with their mortgage payments. This has caused us to have an overstock in foreclosures and homes for sale. We currently have about 11.7 months of homes in inventory in Northeastern Ohio. It has been as high as 15.4 months in the last year. By inventory we mean that if no more homes hit the market it would take 11.7 months to sell what is on the market. This "Overstock" of homes creates a buyer’s market because there are so many houses for a buyer to choose from and it also allows them to control the negotiations and price they are willing to pay.
Then we also have that low pressure system moving in as well, which would be low mortgage interest rates. Not only have home prices fell drastically over the last few years, we also have not seen a rise in interest rates. Low home prices with low interest rates make homes very affordable. It may be a little tougher to get qualified for a loan in this current situation due to tightened credit guidelines. Those who have a little money to put down and reasonably good credit, there could not be a better time to buy a home.
These circumstances alone, could have created a strong storm, but on top of these two real estate phenomenon’s, the government has offered a stimulus package where a home buyer tax credit is available for qualified purchases with a binding sales contract in place on or before April 30, 2010 and closed by June 30, 2010.The government is offering a tax credit that can even possibly be used on your 2009 tax returns. They offer $8000 for first time home buyers and $6500 for repeat home buyers. This is much like the dying "Hurricane Grace" mentioned above. It is like throwing gasoline on the fire!
If you are thinking of buying a home, storms like this, just like the storm in the movie only come along once in a lifetime. Just remember you will need to have a sales contract in by April 30th.
After taking a hiatus from the real estate business over the last two years, these current weather conditions have put the wind back in my sails. I have decided to join Keller Williams Realty in Medina Ohio. If you have any questions feel free to call me, Blaise Rosser at (330)419-0420.
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