The real estate market has been moving along in sub-zero territory for so long that it's hard to remember the white hot days of the early millennium. This shouldn't stop you from purchasing a home. When you're ready to buy, a cold down market can actually work in your favor if you keep a few things in mind.
If you're expecting to make money flipping houses in a down market, go put your money in the gold futures advertised on TV instead. Buying in any market carries inherent risk, but that's multiplied with falling prices, so you need to be prepared to hang onto the property long-term. Whether it's your primary residence, vacation home, or an investment property is your decision, but if you decide to go the investment route, do your research on the rental environment in that neighborhood.
The Bored Seller
Sellers in a down market are not all panicked lemmings heading for the cliff. Don't be lulled into thinking every house you see has a reluctant seller behind the For Sale sign. A shrewd seller will hold the price on the theory that it makes the property more attractive. The perception is that the house is just better—more amenities, no deferred maintenance, or other factors that may give you pause before making an offer. Recognize that after the home has been on the market a while, the seller is bored and will probably be motivated to hear you offer.
The Reluctant Seller
The reality is that as many sellers as not are anxious to move the property. Easy money encouraged buyers into a lot more house than they could really afford and balloon mortgages wound up putting a lot of homes back on the market after just a couple of years. If you make an offer on one of these homes, be sure to allow for a due diligence clause in the contract. Even if you've gotten the sweetest deal of all time, you'll need to spend a fair amount of time and money on inspections. Houses that are great deals tend to have issues—the owners let minor stuff go until you come along and you're looking at the money you're saving on the house going to deferred maintenance.
Research the Neighborhood
Go online and research neighborhoods. You can see trends in closed sales and in currently listed properties. Ask your realtor for the hard data—square footage, days on the market, price reductions, lot size—anything that contributes to the value. Is the neighborhood in a desirable school zone? If so, that's a great indicator that when the market picks up you're in the right place.
As you can see, you can make a cold market work in your favor. All it takes is working with a great real estate agent (such as one from IRG International Realty Group Ltd), patience, confidence, and thinking like a seller.