"I remember when I could have bought that property on the corner for $5,000. Now it's worth $50,000!" Sound familiar? Everyone's grandfather has a story about how they coulda, shoulda, woulda bought real estate when the prices were low, but just didn't pull the trigger. Is that going to be your legacy, too?
We are living in one of the best buying opportunities in the history of these great United States. A couple years ago we were in an extreme buyer's market, and we couldn't see an end in sight. Nobody knew where the bottom of the market truly was. However, that story is beginning to change. The economic indicators are beginning to shift to a more neutral market, inventory levels are coming down, and from all appearances a bottom has been reached.
What does that mean for you? It means that if you haven't done so already, IT'S TIME TO BUY! The good deals are quickly evaporating as more and more investors are seeing the opportunity and snatching up bargains. As a prospective homebuyer, you need to take advantage of these low prices, higher than normal inventories, and government tax credits before this train leaves the station. And don't just take my word for it!
According to Brett Arends of the Wall Street Journal, if you study the information in the latest Case-Shiller data and match it up with recent Census data, it confirms that this is a phenomonal time to buy. Real Estate has dropped 30% from its 2005 peak and mortgage rates have also plummeted during this time. In 2006 the average rate on a 30-year fixed loan was 6.4%, however now you can get one for around 5%. Most experts agree that buying a home in today's market is comparable to the housing market in the mid-1990's when homes were an absolute steal.
So, what about the mortgage resets coming in the next two years? What about all the unemployment rate and foreclosures? Arends says that although these are valid arguments for not buying when homes are expensive or even averagely priced, the whole point of markets is that they adjust. Right now, all things considered, prices are extremely cheap. As long as you have stable income, and can get a 30-year mortgage around 5%, this is your time to go make an aggressive offer on a home.
Arends goes on to say, "Over and over again, history suggests that the best investments are the ones no one wants-gold when it was $260 an ounce, Amazon.com when it fell below $10 in 2002, Hong Kong shares during the SARS "crisis" in 2003, and so on. If an investment feels comfortable, it's should make you nervous. If it makes you really nervous, that's probably good."
Are you a little nervous about the housing market? Then let's grab a pen and write that contract up now.
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