Have you been hearing the murmurs lately?

“Things are picking up a little bit down here.  There’s still a lot of REOs and short sales but buyers are starting to come out….”
— Laura Jaffe, Keller Williams Realty, Palm Beach County, FL

“My clients put their home on the market in a nearby town and the most unthinkable thing happened in the first couple of weeks – they got a contract with some wonderful buyers!
— James Downing, Coldwell Banker Residential Brokerage, Washington, DC

There also seems to be a lot of anecdotal chatter in the real estate blogosphere.  Some people are asking, “Is this the bottom?”

The Spring Market

There was a time when mortgage interest rates were anywhere from 17% to 19%.  You read that right!  Mortgage interest rates close to 20%. And they stayed that way for a long time.  In fact, I still hear stories of people rushing to refinance when rates “dropped” to 14%.  Amazing, huh?

Here’s the point.  Even when mortgage interest rates were sky high, people were still selling houses and buying houses.  Was it hard? Yes.  Did people have to get creative with financing? Yes.  Houses still went from Seller to Buyer and, eventually, when rates started coming back down the home owners refinanced into lower rates.

What does that have to do with now and whether or not we’ve reached a bottom in the housing crisis?

The fact is that for any number of reasons, people who are in the market to buy a house or sell a house usually get really serious about it in the Spring.

• It’s warmer.
• Daylight Savings Time creates more time to go look at houses in the daylight.
• School is about to end for the year and if parents want to change school systems, now is the time.
• The trees, flowers, and birds are out announcing the re-birth of all the nice living things.  Houses that have gardens and trees around them look a lot more attractive.

Here are the added incentives, courtesy of Uncle Sam and the home seller:

• The $8,000 First Time Home Buyer Frequently Tax Credit (free money)
• low, low low mortgage interest rates (we’re talking very low 5% range or high 4% range)
• low down payment (3½% for FHA loans and 0% for VA loans)
• Home Sellers willing to contribute to home buyer closing costs

So, while I don’t really know whether we might have hit the housing bottom yet — maybe we have and maybe we haven’t.  I do know that the combination of Spring (the historically busy time of year) and all the incentives are starting to coax otherwise reluctant home buyers into the marketplace.