IS NOW THE TIME TO BUY?
Over the last 3 years RENTALS, especially apartments have been on the rise in the Dallas Fort Worth Metroplex. I would guess an easy 20% increase in apartment unit cost during this timeframe and in some instances up nearly a 1/3rd and climbing. The apartment specials we use to advertise DAILY at www.apartments2go.com back in 2005 are now all history. With the record number of foreclosures nationwide and homeowners in financial trouble apartments continue to be in demand and demand fuels rising rents (not to mention the higher cost to build new apartment communities)
In the mean time back at the NOT so OK Corral home prices have been flat or going in the opposite direction and this has "price" trapped numerous homeowners who need to sell. Unlike apartments, home prices in many instances are BELOW 2005 levels and this inspite of all the inflation. With many nationwide home builders now struggling to stay in business and cutting crazy deals to move inventory, existing homes sales in much of the DFW Metroplex are faced with bone crushing competition and this has help to keep home prices down, at least for now. I expect 2 -4 major nationwide home builders to go Bankrupt along with a score of small local builders before the U.S. housing market stabilizes. With less builders and material suppliers, prices will rise to reflect the true cost of housing.
So why is NOW the time to be BUYING if you are in fact "in the market" for a new home?
The TRUE cost of building a home is absolutely on the rise due to a tidal wave of inflationary pressures that are now center stage in our economic life. Material and labor costs are already up and rising and this will fuel housing inflation. Nearly all commodity prices are showing strong price increases over the last 60 -90 days. Food and Energy costs are now forcing across the board price adjustments and the trickle up inflationary process is only just getting started. During the 70's "Oil Crisis" and inflationary period home prices quadrupled and interest rates hit 20%. At some point new home builders must past price increases to the consumer or face going out of business, i.e., there is a limit on how long they will continue to discount new home prices.
For home buyers, waiting could mean getting caught in a tide of rising prices. At first just your shoes get wet, then you're having to roll up your pants legs. Before you know it yesterday's "deals" are suddenly no more. Then you realize the music stopped playing and you're still standing. Like gas prices, you figured the bump in gas prices followed by a lowering would continue indefinitely. Somehow that was hopeful thinking and if you find yourself in this unfortunate predicament you'll get no price relief from leasing either and you will be faced with paying a higher percentage of your income to cover your housing expenses whether you rent or buy.
Think for a moment about $4 dollar gas? 6 years ago you would have laughed or thought someone was crazy to predict that gas would cost this much. The fact is the future is more prone to produce $5, $6 or even $10 a gallon gas then to ever drop to $2 per gallon. All this is an inflationary omen of things to come. Clearly this is as low of an inflationary warning as you will most likely get.
ALL ARROWS ARE POINTING TO HIGHER COSTS
The 2nd phase of inflation is when the cost of borrowing SKY ROCKETS. If you think inflated prices are going to hurt imagine what 10%+ interest rates would do to your monthly housing / rental budget?
Here are some reasons why you should consider BUYING NOW in the Dallas Fort Worth Metroplex.
1. Inflationary pressures are on the increase - (I think you already knew this.)
2. Many economists are predicting future rising interest rates to battle inflation. Just look to the late 70's and early 80's to find out how the Fed fights inflation and then start to connect the dots and you will see why there will be a growing pressure for interest rates to RISE.
3. Home prices are now significantly undervalued in the DFW Metroplex (CNN MONEY SAID 30% UNDERVALUED as of March 2008) and that was before any additional price erosion since this report.
4. In 2007 DFW ranked #2 in U.S. job growth. (population growth means housing growth and demand)
5. DFW ranks as the No.1 population growth market in the U.S.A for 2006-2011 with an expected population increase of 630,000
6. DFW is expected to grow from 6 million to approximately 8.5 million by 2030.
Sounds like a good place to be owning a home right about NOW!
Don't be the last one to realize you made a serious timing mistake. There are great home buying opportunities in the market now. Locking in a low price and low rate will lock in your monthly living expenses for years to come.
Home builders like Highland Homes have introduced an incredible line of New quality built, Energy Efficient Homes with "lifestyle" Floorplan layouts and 21st Century technology features that will simply amaze you while meeting the needs of today's busy families.
In all this, take one word of advice. THINK!