With lower interest rates and plenty of homes to choose from, now may be the right time for you to purchase real estate. Today's lower interest rates may not be around when prices flatten out, so trying to time the market rarely works to your advantage. Another problem with trying to time the market is that it requires a rising market to know just where the bottom was...hindsight is always 20-20, isn't it?
In many cases, purchasing a home may be cheaper than renting. In my market area, it is difficult to find a decent rental unit for under $1,300/mth. That's $15,600/year that could have gone towards your own mortgage, instead of paying your landlord's mortgage for him. Your landlord loves you, by the way, because you're making him rich. You are literally buying his property instead of your own. Think about it.
Then there is the distressed (foreclosure) property market. While many of these properties have condition issues and other challenges, in many cases they are priced below market value and offer opportunity for those willing to put in a little sweat equity to make a profit. If you are considering purchasing a distressed property, I suggest you consult a real estate agent who specialized in the foreclosure market to assist you. It can be tricky to navigate.
All investments carry some level of risk, and purchasing real estate is certainly no exception. This is not the time to make decisions that have not been carefully analyzed. What is a good purchase for an investor may not be a good purchase for a typical homebuyer. This is why you should always work with a real estate agent who can guide you in the right direction and provide the information you need to make an educated decision based on your individual circumstances.
Many people wish to wait "until next year, when prices may be lower" which of course, is a risk in and of itself. Prices may be lower, or may be higher. How many times have you waited for that special sweater at your favorite store to be marked down, only to discover that it was snapped up by someone else before you had the chance to purchase it? It may be a simple analogy, but the principle is the same: sometimes you snooze, you lose. If that's okay with you, then go ahead and wait it out. Hopefully you won't want to kick yourself a year from now.
The truth is, none of the experts can accurately predict the real estate market any better than the experts can accurately predict the stock market or what gas prices will be a year from now. If you purchased real estate in 2006 or 2007, you most likely got a great home at a terrific price with a low interest rate. Provided you stay in your home for several years (something I always recommend), you will benefit when property values eventually rise again.
I actually purchased my own home when the market was so hot that homes were selling in just days and for full list price. My home is now worth about $100,000 more than it was when I purchased it. Had I purchased a few years earlier, my home may be worth $25,000 more than that. Had I purchased just two years ago, my home may be worth about what I paid for it. That's the nature of real estate. Values go up, values go down, and when you purchase and sell makes all the difference.
For the typical homeowner, purchasing real estate should be a long term investment as well as a good little tax deduction, a place to live and make memories that will last a lifetime. Would I be comfortable selling my home in today's market and purchasing a new home? You bet your booties. In fact, I wish I could do just that, because I feel this market offers tremendous opportunities. The problem is, it's not the right time for me to do so because my youngest son has three more years of high school. If the market values are higher in three years, I will make more money on the sale of my home. Of course, I will also be paying more money for my new home. Therefore, I will not have gained anything by waiting and may actually lose money because of the higher purchase price on my new home and potentially higher interest rates. But that's life, folks. Sometimes you need to make decisions based on what is right for you and your family instead of making decisions based solely on the financials.
So will 2008 be the year you wish you'd bought real estate?
Great content.... Great title!!! I might have to borrow this one. Thanks for putting together some very valuable information for the consumer.
CHIP: I'm "buying" to see, as in, I'm "dying" to see what the future will bring?
AUDREY: Each person has their own "right time" to buy!
ROYAL: Yep. So much information and conflicting opinions. Each market is different. Buyers should consult a professional REALTOR!
DEZ: You are very welcome! :)
COLLEEN: Yep, yep, yep! That's what I'm sayin'... Thanks for your comments!
Beautifully written info for the consumer....for us too!
TONY: I agree ~ thanks for stopping by!
SALLY: Thank you and have a wonderful day, Sally.
Just like we do in the stock market Kelly: Buy low, sell high! You can't buy much lower than you can now, nor will be you able to get much, if any, better interest rates! NOW's the time to BUY! Great post!
DEBE: Yes! What many don't understand is that it is difficult to both buy low and sell high at the same time. You take what you can get!
ANN: I will!
GARY: Thank you very much, Gary.
KAREN: I sure hope so ~ here's to a great year for buyers and sellers alike!
DEBRA: That's our job...to educate the public and get the word out! Thanks!
Kelly,
..the smart buyers-and foreign investors-have already answered your question!
Steve
STEVE: You are right!
LARRY: I'm sure some buyers are overwhelmed and nervous. Being cautious is a good thing. Being frozen into inaction is not so good.
GITA: Even segments within a market...
JULIE: Fantastic Julie...I hope 2008 is great for you!
KEITH: Very good point. Thanks for commenting!
Kelly,
Timing the market is generally a futile exercise. In many areas, like here in Las Vegas, prices have dropped way down and mortgage rates ares still nice and low, so now is as good a time as any to purchase a home.
Kelly,
This is all very basic, but you explain it so that the buyer can easily understand the market, which can sometimes be difficult. Great information!
Kelly,
Thanks for a great post. It really hits home in the second home market like Park City. We are trying similar educational articles on our blog www.parkciyjournal.com
Kelly...Just read about your post on RE/MAX Mainstreet. Congratulations on the plug. As I missed this I'm personally glad they shared it with us.
Great post! Absolutely dead on.
Kathleen
Dear VERY PROFESSIONAL: Please email or call me privately if you wish to discuss.
Kelly,
You are so correct! This is a time when you want to buy and people will be kicking themselves for not buying.
I think this is a great time to buy! We have some super deals in my area and with the tighter lending rules it's good to know that you will get a good solid loan.
CHARITY: I agree. Thanks for stopping by and commenting!
Kelly,
You're title is INCREDIBLE! Thanks for putting what we've been preaching into one easy post.
I wish we could find an expert or two out there to give us a long-term predictor of interest rates, because although you and I know they are going up again, folks certainly aren't hearing that on the evening news. It would help us make the case that buyers could be missing out on "the" opportunity of a lifetime, including the chance to make memories along the way. ~ Julia
JULIA & MATT: Too many people wait until the "right" time, but of course there is no universal "right" time for everyone. This market has many challenges as well as opportunities for both buyers and sellers. Prices may drop more, but that doesn't mean there aren't great deals out there right now. Who wants to miss out on their dream home because they waited? Who knows what inventory will be available when the time comes to buy? Particularly when someone is looking in a particular neighborhood or for a particular model.