There was a good article on MSN recently dealing with the housing market. I was impressed with the thoroughness and thoughful insights expressed by the author, Melinda Fulmer. Here's the link:
http://realestate.msn.com/Buying/Article2.aspx?cp-documentid=6112643
In the conclusion of her article the author points to 5 good reasons to buy right now, and 5 good reasons to wait. You should read them, ESPECIALLY IF YOU'RE AN AGENT PAID TO INFORM THE PUBLIC.
In the meantime, here are some good quotes for Lancaster Countians:
"But for many buyers, there's no real need to wait for the market as a whole to officially bottom out, says Delores Conway, director of the Casden Forecast at the University of Southern California's Lusk Center for Real Estate. "Real estate is local," Conway says, and therefore what constitutes the bottom for the country is meaningless for those looking to buy and sell homes in their own neighborhoods."
"Waiting for the absolute bottom to hit before buying puts you at risk of missing it and getting caught up in a
market on the upswing. Plus, for some first-time home buyers, owning simply makes better economic sense than renting."
"...even in a down market, the best houses are at least holding their value...For some people, the value of the local public schools will play a large part in their buying decision. A well-designed house in an established area with a good public-school district will hold its value and save you money in the long run. "These places don't get hurt as much as the whole market, and they recover faster"
"Of course, there are some people who are better off waiting in this market: people who bought their current home in the past couple of years. In this short period of time, the value of the home hasn't gone up enough to compensate for the agent's commission and other selling costs."
"...five is the magic number when it comes to buying and selling: If you've been in your house five years and plan to move to a place where you will stay at least another five, you're probably OK."
"If there are a lot of foreclosures continuing to pop up, prices might fall further than you'd like in the short term. That may not be an issue if you plan to stay put for a while, but it could limit your options if you need to sell or refinance your mortgage."
"But ultimately, the market will come back up, he notes, even those markets in California that are taking a beating. "Does anybody really believe that California won't come back again, and with a vengeance?" he says with a chuckle." (I threw that one in for my California friends...)
Mrs. Fulmer makes one of the best arguments that "now is a good time to buy" of anyone I've heard recently. She examines the circumstances that would make buying a good choice, but also recognizes the reasons for staying put. Rather then believing or rejecting this happy slogan blindly, we should analyze how our local market is changing and change ourselves to find success.
So for those whose opinion tends towards "waiting for the bottom" - my challenge would be to look at your circumstances and reasoning, and don't make a foolish mistake just because the media says the sky is falling.
Here are the 5 reasons, reprinted with Melinda's permission:
5 REASONS TO BUY
1. Prices in the neighborhood you are interested in are relatively stable. Either they are holding their own or increasing, or the pace of decline is slowing significantly. If you have to move and don't like apartments, the small penalty you pay for missing the bottom may not mean much.
2. You plan to stay in the home for more than five years. If you can stick it out that long before selling, economists say you’ll probably ride out any downturn and come out ahead on price.
3. Your rent rivals a mortgage payment. If you can afford to buy, it can give you one bonus that renting can't: the mortgage-interest deduction on your taxes.
4. You've found the right house in the right area for you. The schools are great. You love the area and know it would be hard to find another house like the one you have your eye on. In a better market, you would most likely have much more competition for that home.
5. You've built equity in your house and are moving to a place where homes are cheaper. In your new market, your money will go a lot further.
5 REASONS TO HOLD OFF
1. You've lived in your house less than two years. Chances are you haven't had enough time to accumulate equity in your home. Indeed, you may have negative equity, if you live in many areas such as California, Florida, Arizona or Nevada.
2. Your job security is uncertain. If your company or business is in distress, it's probably better to stay put until the smoke clears.
3. You don't plan to stay in your next house at least five years. While it's not important to buy at the exact bottom of the market, it is important to stay long enough to ride it out completely.
4. You don't have good credit or a decent down payment. Do you have a job and income you can document? As a result of the subprime lending crisis, lenders are much more careful about whom they're giving their money to.
5. You have an existing home to sell in a neighborhood where prices are dropping precipitously or where the number of foreclosures is spiking. In this climate, you're probably better off waiting out the storm.
(Courtesy Melinda Fulmer and MSN Real Estate)
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Jeff- Finally a reporter who thinks! Send her down here to write for the Palm Beach Post!