Is It Time Yet?

Q: "My partner and I have been looking to buy in Provincetown for a couple of years. Every time we find a property that we like, my partner says we should wait a little longer, that prices are still dropping. We’ve missed out on a few properties at this point. When will the prices level off?"

A: From our perspective, the leveling off has already begun. There are indicators to suggest that there is no time like the present to make a move. As a result of the crash of the financial markets, we are seeing sellers withdraw their properties from the market. Those without an urgency to sell are deciding to wait out the cycle. The result will be a reduction of inventory, a shrinking of the supply. Demand may begin to rise after this week’s news of the proposals on the table for the Treasury to buy securities backed by 30-year fixed rate mortgages from Fannie Mae and Freddie Mac. If rates drop to 4.5% as proposed, we expect more buyers to enter the market to begin absorbing the current inventory. The result of this equation will be an end to the price reductions and an increase in buyer activity. With more buyers in the market, prices will be poised to level off.