As a long time Illinois mortgage banker, I know that buying your first home is scary in the best of times. It has to be absolutely terrifying when there is talk of recession, home prices are falling and stories of foreclosures and the mortgage credit crunch lead the evening news. It's got to be scary to be a first time home buyer, but going past fear you see opportunity, and this is a classic buyer's market.
I've always followed the stock market. Greed and fear rule there, and you can see how people buy and sell in a herd mentality. I remember back in the late 90s when the Internet was the rage and new dot.com stocks with no profits, and in many cases no sales were priced higher than many of our largest and most profitable companies. Now, the Internet is a big part of everyday life, but of the companies that survived, most are selling for a small fraction of what they went for back then. And those stable profitable, low tech companies, they were going for a song in the Internet craze and are hitting new record highs now.
The real estate market doesn't move as fast, and it usually doesn't go to the same extremes (at least not here in the stable Midwest) but the same psychology is at work. When times were good, no price was too high. Now, fear has taken over and the first time home buyer is sitting on the side lines, waiting for a sign that the danger has passed, and it is okay to make the move into home ownership.
The truth is, this is a great time to buy. The smartest time to buy is when more people want to sell. There are bargains now as nervous sellers can't wait to unload their homes. Also, rates are low, and though some mortgage programs have been eliminated, there are still a lot of great programs low or no money down.
It is a scary time to buy, and it is easier to do what everyone else is doing. But a few years from now, when the real estate market is up again, you may kick yourself and wonder why you didn't buy when the prices were down.
Pete Thompson is an Illinois mortgage banker who provides superior mortgage service and competitive mortgage rates in Chicago, the Chicago area and throughout Illinois. Click here for a Free copy of The Real World Home Buyer's Guide - How to Save Thousands when Buying a Home and Getting a mortgage.
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