Are you planning to wait until spring to begin your search for a home?   Although spring is the classic time of year to buy, you may want to consider the following before deciding to postpone your purchase.

Right now, the most compelling reason to jump into the housing market is the mortgage interest rate, now at all time lows. Smart buyers think in terms of monthly payments and the long term cost of a loan in addition to the purchase price. Currently, interest rates are the lowest they’ve been in over 50 years, at fixed rates of 4.17%.  According to the National Association of Realtors’ Chief Economist, Lawrence Yun, “ Economists are predicting a rise to 5% or 5.5% in the course of the next year.”  That translates to almost $2,000 a year or $57,975 over the life of $200,000, 30-year fixed rate loan.  The risk of rates increasing seems to overshadow the risk of prices falling further.

In addition to interest rates being a major factor,  there are a few other determinants to consider.  Inventory is plentiful.  Nationally, there is a 10–12 month supply of homes on the market, which is considered high.  A six month supply is thought to be a balanced market and is historically the average. We are tracking the national figures.

Prices are the final factor.  “Median prices are lower than they were,” says Lawrence Yun, “and economists expect increases in values during the next twelve months.”   In the Rhode Island market, the median price hit a low in quarter two of 2009 and re-hit that value in Q1 of 2010, but has risen slightly over the last two quarters. While predicting the future is impossible, it does seem like we are at a bottom as the experts are saying.

Considering all factors — the large selection of homes available, a price to value ratio, and especially the cost of your monthly payment, you may find this is the perfect time to start buying your home.

“Nationwide Open House Weekend” will be held this coming weekend, April 10 & 11. This event, initiated by executives at local and state Realtor® associations on the west coast, was created to promote open houses and is spreading east with the National Association of Realtors (NAR) spreading the word. (However, it is not a NAR sanctioned event.)

At Residential Properties Ltd., recognizing our open houses is quite simple, we place an “Open House” indicator on the top of our “For Sale” sign at the property. We also list those available for viewing during every weekend on our website at http://www.residentialproperties.com/openHouses/search/. Typically, this search page will start showing results on Thursday, and Friday or Saturday are the best days for the latest list of properties.

If you are searching for a home, the economists are saying that now may be the perfect time to act. All indications are that prices have begun to stabilize, median prices are statistically flat (with the normal choppiness when you look at month to month data), interest rates continue to be at historic lows, contracts needed to take advantage of the tax credits must be done by April 30, and the inventory of homes on the market is improving.

Of course, the properties can be viewed by arranging a private showing by calling one of our agents.

When I first opened up my company in 1981, people would ask me where I worked and I would say “Residential Properties”…almost as a question, since almost no one knew who we were.  Today, I am proud to say that the RPL Chevron is a very recognizable symbol in Rhode Island and surrounding communities in neighboring states.

The real estate industry today bears little resemblance to the way we did business back then. The internet has changed everything. According to the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, 90% of respondents used the Internet at some point, seven years ago only 41% of buyers used the internet. When asked where they found the home that they ultimately bought, 36% of buyers found the home on the Internet; another 36% learned of that home from a real estate agent. In 2001 48% of the people found their home through an agent and only 8% of the people found their ultimate home from the internet.

It is not always what happens, but how you react that determines your success.  I am proud of the amount and quality of information we provide regardingRhode Island Real Estate. With more and more information on the web, more people are turning to a professional for help sorting through all of it.

And how do people choose their agents?  They look for someone with a great online presence who has knowledge of the process and the market.   That’s the lesson to be learned from NAR’s annual profile of buyers and sellers.

The most effective methods to bring buyers and sellers together are the Internet, working with an agent (who learns about properties through the MLS), and signs. 84% of buyers learned about their home through one of these sources. If you want to sell your home, look for an agent with a great reputation, whose company has a great web presence and good market share.

Spring is finally here and most of my agents, myself included, are seeing signs of life in the Real Estate market.  The latest figures are confirming what we have been seeing, and a visit from NAR’s top economist last week gave us all a little hope that we are finally starting to work through the excess inventory that is bogging down the market.

Bucking the national trend in home sales, The Rhode Island Association of Realtors (RIAR) showed a 12.4 % increase in sales from March 2008 to March 2009, and existing home sales increased 21.5% from February 09 to March 09. National Association of Realtors data showed a nationwide 7.1% decrease in sales during the same twelve months.  RIAR statistics include Rhode Island sales only, while NAR data includes the Fall River and New Bedford metropolitan areas. NAR reported that distressed sales accounted for just over half the sales in March virtually the same as in Rhode Island.

Lawrence Yun, NAR’s Chief Economist was in Rhode Island last Wednesday speaking at a RIAR conference.  He feels the national housing market “has returned to its normal balance after a buying frenzy in the first part of this decade led to a collapse last year, that can set the stage for buyers to return to the market and house prices to stabilize.  A median-priced house is as affordable as it was in 1998, before the run-up in housing prices.”

This Week’s Real Estate Insight:

You can take it from me, or you can listen to these two economists, Yun believes conditions are right for recovery to begin in Providence. “The buyer should be coming back, Providence will be the first housing market in the Northeast to emerge from the housing slump, and  University of Rhode Island  economist Len Lardaro agreed with Yun, saying “Now would not be a bad time to buy real estate – at the right price.”I’d be thinking about buying a house.”