I read this article from the Star Tribune a few days ago, and it has been rattling around in my head since then.
Researchers from the National Association of Home Builders asked self-professed “buyers on the fence” what incentives would motivate most of them to get past their worries and buy. With builders busting at the seems with unsold houses, it’s in their best interest to find out, right?
Besides the economy obviously being a big factor right now, it turns out that some of the researchers’ results were surprising:
Even with houses at rock bottom prices, most seem to be waiting to see if prices slip more.
Even with 5 percent mortgage rates, buyers want them to go lower to 3 percent.
And A zero-down option would be highly attractive to potential buyers.
Tax credits alone, even up to 10 percent with a limit of $22,000, won’t make them budge.
Potential home buyers
think that the incentive packages that home builders offer aren’t all their cracked up to be.
What was the #1 offer that would get them to buy?
A price concession that amounts to a 10 percent discount below true market value and basically instant home equity for the purchaser upfront.
Concerns about falling property values were most prevalent among consumers in the Western region.
Home buyers that were on the fence in the Northeastern and Midwestern states were more likely to be waiting for lower interest rates. Potential buyers in the South tended to be more concerned about their ability to qualify for a new mortgage.
The article ended with a summary of what may be expected from home builders in the near-future:
Bottom line: Look for builders to offer combination packages of special financing, price concessions, lower down payments and perhaps application guarantees. They'll still push for tax credits on Capitol Hill, but financing concessions appear to have more clout with their potential customers.
Sounds like a pretty package.
But not all home buyers are looking for a new home, many if not most are looking to purchase an existing home. Whether your considering buying a new home or an old home, what would convince you to jump into the market now as opposed to waiting for later?
I will start off the conversation with my own concerns: The Economy. As a freelance writer, it would probably not be a good idea for me to take on the additional debt of a home mortgage, no matter how much my neighbors drive my crazy or how I wish I had a garden to tinker with. Were it not for the downturn, I would be jumping into the buyers’ market with both feet – prices and interest rates are low!
Now its your turn!