A Tale of Two Markets Part II

As Percy Montague IV stated in our previous post …Despite headlines touting collapsing prices, the facts paint a different picture. House prices in Virginia per the Office of Federal Housing Enterprise Oversight show a 2% average annual appreciation during the 1990’s, a 12% increase annually duing 2000-2006 and a 3% annual appreciation in 2007. I personally would describe the real estate bubble in Central Virginia as “partially deflated” rather than “burst”.

What about opportunities in today’s market? The inventory of new and resale homes available for sale is at the highest level in many years. Market conditions have encouraged serious sellers to price their properties very competitively. All of these factors combine to make this the most attractive market for home buyers in the last decade. It is a particularly attractive market for first time home buyers or patient investors. For those with a home to sell, they will be both buying and selling in a more moderate market than the fast moving, overheated market of a few years ago. Conventional wisdom may suggest to “buy low and sell high”, but in reality most people buy and sell in the same market cycle, unless they are relocating from a hot market into a depressed area. The only strategy that I would discourage is a seller who chooses to sell and then wait on the sidelines. My concern is that they may end up reinvesting in an inflating market. Now Is A Great Time to Buy.

Percy Montague IV, Chairman, CEO, Montague, Miller & Co.