Analysis Paralysis

I feel compelled to comment on today’s Boston Sunday Globe article entitled “Wrestling with buyer’s anxiety”. As a metrowest of Boston Realtor as well as a lover of bargain-shopping, I can totally understand and empathize with a buyer who is hesitant to purchase when the media is bombarding us with doom and gloom about the financial crisis and declining housing market. What a prospective buyer needs to remember is that negative news/sensationalism sells and the media is digging for doom to report everywhere we look. Another point worth noting is that there is a significant inventory of affordable homes, and interest rates are relatively low so a buyer with good credit and 5-10% down can have many homes to choose from. There are very few buyers overall who have both good credit and deposit money so buyers in this greater Boston area are not competing with many other buyers for the same home, therefore the odds are a reasonable offer on a home may just be accepted by the seller. During a busy market, the competition is fierce which leaves many buyers dealing with multiple offers and bidding wars which only create stress and frustration for all those involved.
I wholeheartedly agree that in order to break through this overanalysis of the market thus paralysis, a buyer needs to consider whether the home is affordable and if they will intend to stay awhile. Most buyers will likely stay in their home at least 5-7 years so the home will certainly appreciate rather than depreciate by then. Simply becoming a homeowner rather than a renter has many obvious perks including tax write-offs, etc. Another question to ask, according to the article, is whether the home price is as good as it will get. This is probably one of the most important points since the chances of home prices coming down much more than another $10,000 or $20,000 is slim in the overall scheme of things particularly if a buyer will stay in the home for 5-7 years–the difference in home price will not matter much unless you move out in only 1-2 years.
It is understandable to feel apprehensive about making a large purchase on a home now but the well-qualified buyer will profit with low home prices and low interest rates. In 7 years they will have had the benefits of tax write-offs and home appreciation while their nervous friends are still sitting–watching, waiting and analyzing on the sidelines without a home.