Q.    Are there any positives in this current real estate buyer’s market?

1. There sure are! Think about the whole picture. It always makes good sense to trade up in a buyer’s market. When prices are lower, it’s a one-time shot to get your hands on a bigger chunk of equity. For example, if you sell a $200,000 home at a reduced price of $184,000, you’ve in effect lost $16,000. But, if you immediately turn around & buy a $300,000 home in a different area you will probably come out ahead!  Remember, prices are down in many markets, and interest rates are at historical lows.                                                                       For example: Your Realtor recommends you lower your asking price $5,000 to greatly increase your chance of a sale.  You disagree because you are waiting for a market price increase. So you wait.
Here’s what could very well happen…. The economy is improving; this tends to lead to higher mortgage interest rates.                                                                                                               Say your dream home would require a $200,000 loan, with a current 3.75% interest rate for 30 years. Over the life of the loan you would pay $123,312 in interest.                                        What happens if you delay lowering the sale price and your home takes longer to sell and in the meantime, interest rates rise to 5% ?  You would then pay $186,512 in interest for the life of the loan. That’s an extra $63,200 in interest, which is the difference between a 3.75% & 5%  interest rate over 30 years.

                        Now maybe that $5,000 price reduction doesn’t sound so bad after all!