Top Five Reasons Why Not To Wait For The Market To Come Back:
1) Demand for existing homes are at it's peak
2) Less competition from new home sales
3) You can buy more home for your money
4) Tax incentives of $6,500/existing homeowners & $8,000/new buyers
5) Mortgage interest rates are low at around 5%
Since early 2006 home prices in Northwest Indiana have fallen an average of 30% from the market peak. What does this mean for home owners who have decided to "wait for the market to come back"? A long wait, a very long wait.
First remember at the peak of the market, home building was very active and new homes were going up everywhere. Buyers took note and the majority of buyers only wanted to view "newer homes" Existing home sales lagged behind new home sales 2-1 or even 3-1 in some areas.
The new home market is at a virtual standstill, with a limited new homes being built. That's good news as there is way less competition for the sale of your home.
Buyers see the value in purchasing an existing home. Buyers are pleased that they can buy a bigger home (more square footage) at a lower price than new construction. Buyers are also finding out that they are able to afford a home in areas that previously were not in there price range.
Additionally, tax incentives allow existing home owners to buy a new home and receive $6,500. You don't have to sell your existing home, you can rent it out - you just have to live in the new home.
Finally, remember that market prices have not even begun to rise. Even if prices rise at 6% per year - (at that's not happening) it could take 5 to 7 years for your home sale price to increase to the peak market price. Can you afford to wait that long? When and if the market swings back and the value of home prices begin to rise, so does the desire of buyers wanting new homes.
In conclusion, with the $6,500 tax credit for existing home owners or $8,000 tax credit for first time home buyers, PLUS the active existing home market creates the best time to purchase a new home. Finally, mortgage interest rates continue to be very low at around 5%.
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