Given all the concerns over the housing market these days, the question on everyone's mind is: Is this a good time to buy or sell real estate?
"It all depends on who you are and what you hope to accomplish," Stephanie Singer, a spokeswoman for the National Association of Realtors, told ABC News.
If you are looking to buy, this is a great time for you.
Interest rates are still at a very low mark, there are a lot more houses available in certain areas and buyers can take their time selecting a home because places are staying on the market longer.
For sellers, it's a bit more tricky.
Some markets have seen significant drops of property value -- some areas, such as parts of Florida, have seen a 20 percent or even greater drop -- leaving homeowners with less equity than they had a few months ago.
- SYNOPSIS: If you're buying or selling a home, there are some basic tips to deal with the rumbling real estate market.
"People need to realize that a home is where you live. It's not a lottery ticket," said Jim Gillespie, president and CEO of Coldwell Banker.
Just because the market has fallen apart in some areas, it doesn't mean that property owners are losing everything.
Many people bought several years ago and the recent drop didn't bring them below the price they paid for their home.
Singer said that over the past six years, the median national price of housing has gone up by 50 percent. She said real estate is a long-term investment.
"Sometimes people can get a little spooked by national media reports about what may be happening, but all real estate is local," Singer said. "They really need to be cognizant of what is happening in their local markets."
And of course, the National Association of Realtors suggests that the best way to get that idea about your local market is through a local real estate professional.
Gillespie said that sellers should also fix up their home so it stands out in the marketplace. He said little things, like painting odd colored walls with neutral colors and cleaning up the clutter, can make a big difference.
"You want your home to stand out because there is a lot of competition," Gillespie said.
Sellers might also want to offer buyers incentives, such as offering to pay taxes or condo fees for a year.
Here are some other tips from Coldwell Banker:
Tips for Buyers
Don't Try to Time the Market When home prices are lower, it is very tempting for potential buyers to try to wait as long as possible in the hopes that prices will decline even further. This strategy can be detrimental. Once a home is priced to what the current market will bear, buyers will make offers. It is best to work with your sales associate to make an offer based upon the prices at which similar homes in the market are selling for. In a buyer's market, there are more opportunities for negotiations, but making an offer is an important step. If you find a house you love, put your bid in and negotiate. Don't let it sit for another buyer to make an offer.
Take Your Time … to a Degree Although each local market is unique, the National Association of Realtors reports that the national home inventory is at 7.3 months. The increased supply of homes on the market gives home buyers a great opportunity to evaluate a variety of properties. However, this does not mean that home buyers should procrastinate. Gauge the time you may have to choose a home by asking your sales associate how long properly priced homes are staying on the market before going into the contract stage. You may find the change in days on the market from last year is just a few days longer.
Realize You Are Competing With Others Don't think you are the only one looking for a new home. Properly priced homes are selling. The National Association of Realtors predicts there will be more than 6 million home sales in 2007, expected to be the fourth or fifth best year in history. The majority of people move based on lifestyle changes, such as new job/promotion, marriage, divorce or family expansion, and buyers are out there.
Understand Your Loan Products The current 30-year fixed mortgage rate of 5.76 percent according to bankrate.com remains near historic lows. Remember that the recent subprime controversy you are reading about only involves only a small percentage of home buyers or potential home buyers. Make certain your mortgage provider is reputable and that you understand the implications, especially the worst case scenarios, of your loan. If you don't understand ask. And certainly do not sign anything without understanding it.
Negotiate on the Incentives Sellers eager to move their homes may offer you a variety of incentives such as cars, trips, clearing credit card bills for you and other deal sweeteners. If you accept an incentive, make sure it makes sense for you. Instead of having your bills paid, you may opt to have the seller renovate the master bathroom or install new flooring. Of course, you can always ask the seller to just deduct that amount from the list price.
Tips for Those Not Doing Anything
Relax Enjoy the American dream of home ownership. Freddie Mac has reported that the annual appreciation of homes in the United States over the last 40 years has been 6.4 percent annually. While "homes are our castles," we also benefit from this appreciation and enjoy the tax advantages home ownership affords.
Relax Some More Most will not sell their home for a loss unless there is sustained hardship like long-term illness, long-term job loss or death of a loved one that might require an immediate move. Those who bought over the last five to six years have enjoyed great appreciation. Those who may have bought over the last year might have seen their home value decrease but history has shown this to be a short-lived scenario.
Don't Use Your Home as an ATM Know the equity you have in your home and work with your financial planner and accountant to determine how to properly use such products as home equity loans to benefit your lifestyle.
Don't Renovate to Immediately Improve the Value of Your Home While bathrooms and kitchen renovations traditionally help the value of a home, doing such renovation for the sole reason of resale value is not wise. Instead, only do it if you will also benefit from the renovation in your daily life. If you are considering a move in a few years, consult with a full-service real estate professional to determine if such a renovation will substantially improve your resale value.
Tips for Sellers
Price Your Home According to the Current Market Just because a house comparable to yours sold for a very high price last year does not mean you will be able to realize the same price when selling your home now. Work with a full-service real estate professional to determine the appropriate, competitive listing price for your home. Remember that in this market, your sales associate may encourage a list price in accordance with other homes currently on the market, rather than those previously sold.
Be Thankful for Appreciation While price appreciation has slowed in some markets in 2006, it is important to look realistically at the financial gains you have made over the years through your home equity.
Make Your Home More Marketable When a buyer sees your house for the first time, a critical first impression is made. If applicable, maximize curb appeal by trimming trees and planting flowers. A fresh exterior coat of paint might also prove valuable. Consider neutral colors for interior walls and carpets. Dark colors on walls, along with unnecessary clutter, make rooms look smaller.
Offer a "Seller's Contribution" A seller can sweeten the deal by including offering assistance to the buyer in ways that do not require lowering the asking price. These tactics can allow your home to stand out from the crowd. They can include buying down the interest rate on the buyer's mortgage, offering to pay a portion of the buyer's closing costs and covering the buyer's mortgage payments for up to the first six months.