I'll start off by saying that my choice of career obviously shows that I'm a believer of people investing in real estate, but that being said, I also believe that purchasing a home is one of the biggest financial decisions you will make in your life and you shouldn't purchase a home unless you are ready. 

If you have been on the fence about buying your first home or selling your current home to either upsize or downsize to a different house, there are some compelling reasons to make a move in 2010. 

#1 - FEDERAL HOUSING TAX CREDIT- The Worker, Homeownership, and Business Assistance Act of 2009 extended the tax credit last month.  First-time home buyers can still receive a tax credit of up to $8,000 for a principal residence.  The tax credit was also expanded so that repeat home buyers can also receive a tax credit of up to $6,500.  This is great news for people that wanted to make a move earlier in 2009, but were a little disappointed they weren't getting to participate in the tax credit with the first-time home buyers.  For more information about the tax credit, click here. 

#2 - LOW MORTGAGE INTEREST RATES - If you are one of the lucky/smart/privileged people that can actually pay cash for a house, then this section doesn't apply to you.  For the rest of you, interest rates are still near historic lows which is a huge incentive for qualified buyers to purchase a home soon.  Rates in the Austin, Texas area are around 5% for a 30-year fixed mortgage depending on the lender and your credit score/history.  Most of the analysts are projecting that interest rates will start going up in 2010.  Reports of when they will start rising vary quite a bit, but many sources indicate they will start rising sooner rather than later (as in anywhere from 1-4 months from now).  What does that mean for a potential home buyer?  One of two things - low interest rates either enable you pay less in interest over the life of your loan OR you can afford to buy a more expensive house now than you will be able to in a year when interest rates have gone up. 

Here's an example:  If you are purchasing a $200,000 house and you put 5% down, you will be financing $190,000.  At the current interest rate of 5%, your principal and interest payment will be approximately $1,020.  If you decide to wait until interest rates have gone up to 6% for that same scenario, your principal and interest payment would be approximately $1,140.  You might look at that and think that $120 more per month doesn't look too bad, but over the life of the loan, that 6% interest rate will cost you almost $43,000 MORE than the 5% loan.  If you buy now, take that extra $120 a month and invest it for the next 30 years...you could have $180,000 saved up instead of PAYING $43k (assuming conservative 8% rate of return).   That one's for you, Dave Ramsey.  :) 

#3 - VALUES HAVEN'T GONE UP YET - Austin is one of the few markets that has been fortunate enough to be fairly insulated from the plunging values we've seen in other areas of the country over the last couple of years.  Values have dropped slightly in some parts of the Austin area, so there is an opportunity to get an excellent deal on a house before the values start to go back up.   Some analysts project the Austin home values to start increasing as early as February 2010.  That remains to be seen, but it is my opinion that now is the time to combine the lower home prices with the low interest rates to get into some of the hot areas of Austin that are poised to see great appreciation over the next 5-10 years (especially in Central and East Austin).

#4 - ADD TO YOUR INVESTMENT PROPERTY PORTFOLIO - These are the times in which investors create more wealth for themselves.  When the home values are down and it's a buyer's market (which we are still in for most of the Austin area), investors take advantage of that to get great deals on properties to use as rentals.  Many of the foreclosures in the Austin area have been flushed out, but there are still plenty of foreclosures and aggressively priced resale homes to be found.  Now is a great time to either add to your real estate investment portfolio or start one if don't already own a rental property.

#5 - YOU ARE TIRED OF RENTING - Let's face it...most people have lived in a rental apartment or houseat some point in their life (growing up, in college, after relocating to a new town, etc.),  but most people would prefer not to rent if they have a choice.  It's no fun to pay someone else's mortgage and not be able to change your space to suit your needs and lifestyle.  If you are tired of renting, but aren't sure if you can qualify or afford to buy a house, the first step is to contact a mortgage lender.  The mortgage lender can help you determine if you can qualify for a loan, how much you can afford, and can walk you through your credit report.  It doesn't take much time and it won't cost you any money to chat with a mortgage professional, so take this first step if you have even a smidgen of desire to buy a house.  If you need a recommendation for a local Austin area lender, you can visit my website for more information.

If you are looking to buy a home in the Austin area, please contact me via my Austin real estate website at www.carlylister.com.   Thanks!