How Price is Trumping Location in Home Sales

The real estate world has long operated under the mantra, "Location, location, location." Whether you're talking about the spot for a new business or whether you're talking about buying a home, where exactly the property is located is an important factor. However, recent trends in the real estate market have changed the game up a bit.

Today, homes are selling at prices well below what they've been at in over a decade. Between tax credit incentives and low prices due to market pressures, people are snatching up homes like hotcakes. When you factor in low mortgage rates, it's no surprise to find that more and more homes are selling for less.

One of the current market phenomena is the return of repeat buyers to the real estate market. The ratio of repeat home buyers continues to grow, while the ratio of first-time home buyers shrinks. Nearly half of all home sales in the second quarter of 2009 were to repeat buyers. During normal market times, the ratio is more like two thirds new home buyers and one third repeat buyers.

In addition, many new and repeat home buyers are taking advantage of those current conditions. They are buying foreclosures, sometimes at a fraction of what the home would cost if it were not distressed. Other buyers want that $8,000 federal tax credit. Today, more people than ever can afford the price of a new home. Now, home buyers can get bigger homes for less money than just a few years ago.

Many major housing markets, including Denver, have seen a price stabilization in recent months, as well. What this means for home buyers is that we may very well be toward the bottom of where home prices are going to get. Now is as good a time as any to get into a new home because of these low prices. No one knows for sure how long it will be before home prices begin to rise again.

Home sellers are pricing their homes more realistically, too. Sellers are getting around 90% of their asking price, which is a rather staggering statistic considering just how low home prices have gone. On top of this, the average time it takes to list and sell a property is dropping, too.

In most areas, sellers outnumber home buyers by two to one. When you couple this with the prevalence of unsold homes and distressed properties, you can see the many reasons for these low home prices.