Be very careful on what you hear from others when it comes to the real estate market
There is some news out there from realtors and so-called experts advising buyers to maybe wait for a year or so. This kind of stuff angers me for many reasons. Here is a question I just read from a potential home buyer:
"Where do you think home prices will be by the end of this year and by next June 2011 in New Jersey."
Answer by a realtor :
"I'll go with down 3% end-of-year and 5-6% by next June. Employment number continue to be terrible, so there is no hope of appreciation for the short term. There is also more and more inventory which will add to negative price pressure."
Nobody has a true crystal ball. All many of us can do is speculate, use our knowledge, expertise, and common sense. But if you are dealing with someone that doesn't look at something from both sides of the fence, to give you good knowledge and food for thought, it could cost you thousands of dollars.
Trying to determine when a good time to purchase a home can be frustrating at times. Asking yourself, if we wait a tad longer, we could get a better deal. What the realtor stated above, I will not disagree with. There is some logic to what he stated. But giving you this information and not taking it to the next level, could make your decision a bad one. Let's explore it some more.
Comparing future depreciation of homes by 3% to 6%
This scenario is taking into consideration that you are currently renting or that you own a home. So if you bought a home now and compared it to buying a home in 6 months, by December 2011, you would have gained slightly on the difference of equity by buying now. If you take in account the 3% difference in the home price in 6 months from now, and the fact that your payment would be $33.32 more a month, you would have spent $399.84 more in mortgage payments. Yes, you would have bought a house for $7,125 less with the 3% depreciation, but by December 2011 that difference would only be $5,044. Then subtract the $399.84 in extra payments, then that difference drops to $4,644. KEEP in MIND - You will also be starting an interest deduction sooner if you bought now also, which I didn't figure into the whole equation. Which means you would write some of this off in 2011 which you would not have until 2012 if you bought at the end of the year. (my main focus was just showing if you bought now than in 6 months from now)
Summary : You need to ask yourself these questions.
- Why are you buying a home?
- Can you actually afford to buy a home now?
- Review your goals. Your 3 yr, 5 yr, and 10 yr goals. The average person stays in their home for 6.7 years.
Overall, you hear so much talk about people being upside down in their homes. Ignore this and go back to my questions, the main reason to why you are buying a home. It's normally a long term investment, a place to grow with memories, to raise a family, and so many other reasons. There is no crystal ball that tells you what interest rates will be in 6 months or where home values will be. Think clearly before listening to just one side.
Buy now or wait ??? If I was in the market to buy, felt comfortable, had all my ducks in a row, I would buy NOW.
KEY REMINDER : Not all real estate markets are the same. Some values have increased in the last 6 months. Some haven't moved as much as other areas since 2008, and some are still dropping. Deal with a real professional realtor that knows your market.
For good reading :
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For more information on FHA loans, please go to this link. The FHA Expert
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!
For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors
Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc
_____________________________________________________________________________________________________________________________
FOLLOW ME ON FACEBOOK
- FHA Loans - USDA Loans - VA Loans -
- Energy Efficient Mortgages -
- Conventional Loans - 203 k loans -
- FHA Home Loans - Mortgages -
Experience & Knowledge at its BEST !!!
Follow me on:
______________________________________________________________________________________________________________
For more information on FHA loans, please go to this link. The FHA Expert
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!
For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors
Copyright © 2011 by Jeff Belonger of Infinity Home Mortgage Company, Inc
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For starters every market is different. Many markets are healthy, foreclosures nil like rural state, like Maine where houses are soooo much cheaper. You can buy a quality home in the $40's, $50's and nothing is wrong with it. If you rent for a year or more, that is cash in the trash. If rates to buy are historic lows ( a friend of mine just got a home equity loan and he is crowing about the 3.7%..unheard of low that won't last forever). So experts, media trying to make one giant market in a 50 state nation is just words, predictions for whoever listens. Get away from the water cooler talk. Start owning, do the best deal you can in todays market, get your financing in place and start building equity, create the best hedge against inflation known to man...real estate. When brokers repeat these rumors, you help the rumor mill. What is the market in your area like..you are the professional expert in your market..the one that counts. not some NYC professional of economics on CNN as the sole authority.