Perhaps Mr. Twain had his back to thewindow – the window of opportunity,that is. If he were alive today, wantingto buy or sell a home, would he see thewindow of opportunity open widebefore him? Or would he make themistake of overlooking it until it ceasedto be one?

For the past several years, many people have put theirlives on hold. But if circumstances in your life suggestthat it’s time for a new home, then the time to act isnow. We’ve said this before, yet it’s worth noting again –the sun is shining on our real estate market. The chartbelow illustrates we hit a seasonal low in December2009 but are on the rise again.

Four key factors have combined tocreate these favorable conditions:

Affordability – The rapid priceappreciation from 2003 through2006 was unsustainable. Prices roseso quickly that many buyers weresimply forced out of the market.

However, in the past two years, home prices across ourarea have adjusted. Houses are now more affordablethan they have been in years.

Selection of homes – We’ve been in a buyer’s market.Supply exceeds demand resulting in a great selection ofhomes for sale. And unlike the frenzied days of the pastmarket, buyers today generally have more time to makea decision. But this is not always the case. There areproperties coming on the market priced right and ingreat condition, so it’s not unusual for them to receivemultiple offers and sell right away.

Interest rates – Mortgage interest rates are at historiclows. As the Fed works to fight the recession, the fedfunds rate has been cut to extremely low levels. As aresult, mortgage interest rates are at historic lows. Lowrates allow buyers to purchase more for their money,since their monthly payments will be less for the sameamount of money borrowed.

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SPRING 2010

Prudential Patt, White Market AreaRolling 12 Months Sales 2009 – 2010

“I was seldom ableto see an opportunity

until it had ceased to be one.”—Mark Twain

Source: LVAR MLS Pended Sales (properties under agreement)

Doug Patt, Principal, Prudential Patt, White Real EstateDon Patt, Principal, Prudential Patt, White Real Estate

Doug Patt, left and Don Patt, right

The Patt,White Report

The Premier Group

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Tax credit – The home buyer tax credit jumpstarted thereal estate market last fall. Moody’s economy.comestimates that 300,000 to 400,000 additional first-timebuyers used the credit this past fall. Now that Congresshas extended the credit for first-time buyers and added acredit for current homeowners who purchase a home,this wave of activity should continue. First-time buyers(defined as those who haven’t owned a house in the pastthree years) are eligible to receive up to an $8,000credit. Current homeowners (those who have lived intheir house for three of the last five years) can receiveup to $6,500. These credits go a long way towardreimbursing the costs involved with buying and movingto a new home. To take advantage of the credit, anagreement of sale must be finalized by April 30, 2010and closing must occur before June 30, 2010.

The window will close.

As Mark Twain so eloquently noted, opportunities donot last forever. The window of opportunity to buy ahome under the favorable conditions We describedabove will also cease to exist. The opportunity won’t endwith the conclusion of the tax credit but will continueon for most of this year. Then it will begin to graduallyclose when the following forces take hold:

Demand will begin to equal supply – The inventoryof homes for sale has been steadily decreasing. As morehomes sell, demand and supply will balance. When thisoccurs, the selection of homes for sale will decrease,making the purchase of a home more stressful as morebuyers compete for the best on the market. And, as inany situation where demand and supply are in balance,prices will again begin to rise.

Mortgage interest rates will rise – The economy willcontinue to grow, and when the Fed feels secure that therecovery is sustainable, they will begin to raise the fedfunds rate. When this happens, mortgage interest rateswill begin to rise, most likely to 6% or more. Whilethis is still a great rate, borrowers will get less home forthe same monthly payment.

The window is open for homesellers, too.

If you need to sell your home in order to purchase anew one, you are probably thinking, “This sounds greatfor buyers, but what about me? Isn’t this a terrible timeto sell a home?” The window of opportunity is alsoopen for sellers! There are more buyers looking forhouses now than in the past three years.

On average, prices have declined in some areasanywhere from 2.5% to 9.5% since the 2005/2006peak, but from 2001 through 2009, median sales pricein our area has increased by as much as 50%. For mostsellers, their house remains the best investment evermade. Sellers need to move forward in their thinkingand not dwell on what prices used to be at the peak.Those who accept the reality of our current market willbenefit; those who do not could miss great opportuni-ties. If the time is right for a move, it doesn’t make senseto wait until prices begin to rise again.

To gain perspective on this, consider that when movingto a more expensive home, any reduction in value onyour present home will be compensated for by a greaterreduction in value of the more expensive home. On theother hand, if you are adjusting your lifestyle and want

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We truly believe that for thosewhose life circumstances warrant a move,

the time to act is now.

to purchase a less expensive property, any potentialfuture gain in sales price could be offset by an increasein mortgage rates on the property you will purchase.

When you do decide to put your home on the market,a buyer’s first impression is critical. Remember thatyou don’t get a second chance to make a great firstimpression! Too often sellers are emotionally attachedto their homes and cannot see the limitations thatpotential buyers do. YourPrudential Patt, Whitesales partner will addvalue to your home bymaking recommenda-tions that will freshenand update your homeso it is immediatelyappealing to prospectivebuyers. Pre-inspectingyour house also allowsserious buyers to knowwhat issues may comeup in a home inspection.This will eliminate alot of the stress andrenegotiations that can occur after an agreement is writ-ten and buyers conduct their inspections.

A Prudential Patt, White sales partner will also create atargeted marketing plan that uses both traditional andon-line methods. Since the majority of buyers starttheir search on-line, maximum exposure there is crucial.Then our highly experienced sales partners will guideyou through the negotiation and settlement process,giving you the best possible home selling experience asyou move to the next stage of your life.

Is the time right for you?

If you have put your housing desires on hold, now is thetime to turn and see the opportunity before you while itexists. To get started, contact your Prudential Patt,White real estate professional. They have the mostpowerful tools, the best resources, and the expertiseto help you take advantage of this market. At thesame time, apply for mortgage pre-approval. Being

pre-approved will giveyou additional cloutwith sellers and preventthe frustration thatoccurs when obtaininga mortgage afterpurchasing the home ofyour dreams. YourPremier Mortgage loanconsultant will ensurethat you get a mortgageyou can afford and thatfunds will be at theclosing table when youexpect them.

We truly believe that for those whose life circumstanceswarrant a move, the time to act is now. Those who donot will look back a year from now and realize theymissed a golden opportunity.

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Those who do not will look back a yearfrom now and realize they missed a

golden opportunity.

Doug Patt, PrincipalPrudential Patt, WhiteReal Estate

Don Patt, PrincipalPrudential Patt, WhiteReal Estate

Sincerely,

An Independently Owned and Operated Member of the Prudential Real Estate Affiliates, Inc.

AN INDEPENDENT VIEW

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Joel L. Naroff, Ph.D., is thePresident and founder ofNaroff Economic Advisors.He is a consultant toPrudential Fox & Roach,Realtors and Prudential Patt,White Real Estate. Anationally recognized economicforecasting expert, Joel wasawarded the Lawrence Klein

Award for Blue Chip forecasting excellence and was theBloomberg Business News top economic forecaster in2008. In 2007, he received the National Association ofBusiness Economists Outlook Award and was named thetop economic forecaster by MSNBC in 2006.

The economy grew at a robust pace at the end of2009 and it appears that the longest recession sincethe end of the Great Depression is finally over.However, it is not clear that we will be able to sustainthe solid growth pace. High unemployment rates arestill restraining consumer confidence, lagging earningsare keeping firms cautious and even the governmenthas to slow the spending pace eventually. Meanwhile,

the Federal Reserve will start raising rates when it isno longer necessary that the extraordinary assistancegiven the economy is needed anymore. That couldhappen by the middle of the year. Thus, while theeconomy will continue to grow this year, it could beat a somewhat restrained pace.

The less than spectacular growth, however, may notbe a major problem for the housing market. Sales andprices are firming in many areas and not even theultimate end of the first-time buyers/long-timeowners federal tax credit should stop that.Interestingly, even rising mortgage rates could helpthe market. Though increasing rates and risingdemand might seem illogical, it is not: it can forcebuyers who are sitting on the fence to start makingoffers as they fear rates will get away from them. Withdemand growing, home prices should continue tofirm, though don’t expect any large increases. Thattoo would be an incentive to make a move soonerrather than later. In short, the collapse in housinghelped create the economic meltdown but now animproving sector will add to growth. That makes nowa great time to get into the market.

The Premier Group

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