Q: I just got a divorce and want to buy a place for myself.

All the places that I’ve looked at that I can afford on my own are real dumps and need a lot of work. If I wait until next year will there be a better selection?

A: We have a much higher inventory of homes for sale at this time than usual. In fact, we are seeing a larger inventory even in the lowest price ranges. Currently there are 15 homes listed for under $400,000 which is really great for Vashon Island.

In any market the lowest priced homes are not going to be award winning. What you have to look for is the most structurally sound home in the best location. Ugly is fixable! Homes that need some work, especially cosmetic, have historically been the best chance to build equity for first time and low income buyers.

Think of this as a transitional purchase. As you build value in the home you will build equity that might translate into something nicer in the future. Waiting to buy will not necessarily bring you any benefit. Prices will continue to go up and inventory may return to our usual, lower levels. If you wait until next year you might have less to choose from and higher prices.

“Location, location, location” is a rule that is still true today. Try to buy in those areas on the island that bring more on resale. Evaluate the houses on the market for those things that most buyers value. Two bathrooms and two to three bedrooms are in most demand. A view is always a high value, as is acreage, if you can afford it.

Another good rule of thumb is to buy the “dog” on the block, not the “castle”. If it’s the nicest home in the neighborhood you may not be able to increase its value as much as buying more of a fixer in a better area. Put in the “sweat equity” and it will pay off for you.

Q: We were going to buy this year but all of this talk about failing loans and foreclosures is making us nervous.

Maybe this isn’t the best time to buy. At your suggestion we got pre-approved and know our credit is good. We also have a good down payment but we don’t want to make a big mistake. What do you think?
A: This is actually a great time for you to buy! It’s a good market for well qualified buyers. Rates are low, the lowest in many months, and homes prices have dropped in reaction to the financial news. On Vashon, which is a boutique market, we are not affected as much by the crisis in sub-prime lending and foreclosures. However, real estate has slowed all over the country so that’s reflected in a slower market here as well.

We have a higher inventory of homes than usual which is a help to buyers. Although housing prices have gone up even this year, the rise has not been as dramatic as in the past few years. That means that sellers can’t just list their homes for 20% or more above last year’s value and expect a rush of buyers. In fact, a significant number of homes for sale on Vashon have had to drop their price at least once and many are staying on the market longer than usual.

One important thing to remember, however, is that well priced, desirable homes are still selling in just days. Most of the homes I’ve sold this year I sold within the first week on the market. That’s because I had buyers poised and ready to jump on a well priced home that fit their needs.
If a home is well priced for our current market and meets your needs you still need to move quickly to put in an offer. Those homes still on the market after many months are generally over-priced.