Are We There Yet?

 It’s a question both second home buyers and sellers– for that matter, all buyers and sellers–are asking: Have we reached the bottom of the economic drop? 

According to Moody’s Economy.com, home prices nationwide will bottom out the end of this year if the Obama Administration’s efforts at pumping billions into the economy to stop foreclosures and unfreeze the lending markets works.  

The median prices in 2008 for several (but not all) Colorado resort areas dropped between 2% and 15% (compared to an 11% drop in Metro Denver). Additionally, the volume of sales was off from 40% to 60%, depending on the town. 

So what do you do? If you are looking to purchase a second home, here is an idea. Try negotiating by factoring in a discounted value for this year’s expected drop in value. That amount will vary by resort town and price point. Your Realtor should be able to give you some guidance. If it doesn’t work, go look at other properties–there are plenty available. 

If you need to sell your second home, drop your intended price 5% to 10% lower than what other comparable property sales are averaging. You will attract more buyers and might even trigger a bidding war–an owner can dream, right?