Al Czervik from the movie “Caddyshack,” played by Rodney Dangerfield, gets a call on the golf course: “Hello. It’s my broker. What? Then buy, buy, buy! Oh, everyone’s buying? Then sell, sell, sell!”

What I learned from Al is don’t follow the herd, they are generally wrong and late. If everyone wants to buy, look around, it’s probably the top. Definitely if everyone is heading for the exit, it’s the bottom.

The same is true in the real estate market. When consumer confidence is down and doom and gloom is in the media, look around. Is it time to follow the crowd and buy gold, or zig when they zag and buy real estate?

As all real estate is local, here are the numbers for our region. According to the Virginia Association of Realtors 4th quarter report ending 2011, our sales volume numbers are up from 3969 in Q4 2010 to 4480 in 2011, a 12.9%. That is the highest percentage increase in the state. Also our area rate of foreclosure has dropped 26% from the same period last year. However our median home price is down from $209,900 to $194,000 a 7.6% decrease. So what do these numbers and statistics mean to you. Well that depends on your situation.

If you are a first time buyer, now would be the time to jump in, the water is warm. It is an unprecedented time for you. Interest rates and home prices usually have an inverse relationship. When home prices are high, rates are low or when rates are high prices are low. Right now it is the perfect time to get started on your first home because both the rates and prices are low. First time home buyers are recognizing this and the numbers reflect that. There is an increase in demand for homes under $200,000 and sales are up in that price point from 4th quarter 2010 even without the tax credits. The thing you are racing against is the interest rate clock. While prices of homes may start to stabilize for the under $200,000 price point, a slight tick up in interest rates can cost you thousands in interest or lessen your buying power.

What if you are a move up buyer? Your family is expanding; job is stable and you may have gotten that first promotion. Good news for you too! Your home under $200,000 is in demand and home sales in the over $300,000 price point numbers are down from last year. You get the best of both worlds. While home values are down from their peak, you get the added advantage of more than making up the decline on the buy side. For instance if the market value for your home use to be $200,000 and now its $180,000, at 10% decrease from the peak, that’s OK because the larger home that was $400,000 is now $360,000 the same 10% decline more than covers the market value adjustment when you sold. Again, your race is against the interest clock.

Real estate investors? The investors I know are losing sleep at night hoping the economy does not recover until they have a chance to buy as much rental property as they can. As an investor my self, what I see is that with rates low and prices low, the margins are such that cash flow will usually allow you to hire a property manager freeing you up to spend time with your family or simply focus on buying. I have also seen more sellers offering owner financing and low down payment loans on certain foreclosure homes. Buy and hold investors know that it is not how high you sell but how low you buy that will help fund your children’s college or line that retirement nest egg.

Where does that leave home sellers of the more expensive homes in this buyers market? Well don’t feel bad. While it has been said that we are in a price war at a beauty contest, homes are still selling. Say you have a large two story home on a large wooded home site. The kids are all off doing their own thing and you envision doing better things with your time than rake leaves and vacuum bedrooms that nobody uses. Here is the strategy for you. If you have the ability to rent your home and buy your one level low maintenance home that would be the right direction. Supply and demand of rental homes has driven up the rental rates while the low interest rates let you maximize your buy side. Use a professional property manager to handle the details and sell when the market recovers. It is not a direction for everyone, but one to consider.

Another thought is offer owner financing. I have purchased several homes this way and it is a win/win. You get to earn a higher rate of return on your money than what the banks are paying and often can sell your home quicker and for more than with conventional mortgage terms. Have the buyer pay off the balance in 5 years to get the bulk of you money in a lump sum when the lending guidelines come back to the center of the spectrum and they can refinance. Again, not for everyone but by surrounding yourself with a good attorney and real estate agent, this could be an option.