Real estate agents constantly say it, mortgage companies push the saying on anyone who will listen, the National Association of Realtors spends thousands to advertise it...
"There has never been a better time to buy!"
Never? Could it be true? Or, just maybe, this is some advertising hype thought up by commissioned salespeople to try and drum up business in the worst real estate market ever. I mean, we all watch the news, right? Home values are in decline, sales have slumped and foreclosures are on the rise. Why sould I buy? Why me, why now?
Not to discount anyone's misfortune or to contradict the entire news media, but
why not buy now?
Lets be honest, as Americans, we are an opportunistic group of people. Realistically, the opportunity can't get much better. Home values are down (you can buy a home for half of the cost to rebuild it!), interest rates are at an all time low, and the overall economy is improving. This is really a kind of "perfect storm" for anyone looking to purchase a home or investment property. And, trust me, it can't stay like this much longer.
It is painfully obvious that there was too much speculative building. It was widespread across the country, and no one feels the pain more than the builders, developers and those who bought their home at the peak of the new construction boom. But, with this misfortune, comes opportunity. Nice homes, which, with the current market's price of construction materials, would cost $100 - $130 per square foot to build can be purchased at $65 per square foot (sometimes less). It is hard to argue that this deals are not incredible, even in a "depressed" market.
The mortgage giant Freddie Mac has published its "Primary Market Mortgage Survey" since 1970. This survey tracks interest rates. The standard thirty year Fixed Rate Mortgage (FRM) was at 4.78 last week, the lowest point ever on record. Just one year ago, in 2007, the 30 year FRM was at 6.06. These are unbelievable rates, just as low as the "teaser" rates that brought so many buyers into the market on adjustable rate mortgages in the early part of this decade, only this is a Fixed Rate Mortgage. It really can't get much better than this!
Obviously, our economy is not the best it as ever been, but improvements are beginning to become apparent. According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) has increasedevery month since January of 2009. At first glance, it doesn't seem like good news when consumer prices are going up, but this is a very good indicator that consumer demand has increased. What has been happening during much of the recession is deflation, or the dropping of prices because consumers aren't buying much. That creates a vicious circle, leading companies to stop production to get rid of inventory, and for consumers to expect prices to drop continuously and thus waiting for prices to drop enough for a great bargain. Although only slight increases have taken place, in my opinion, this is a good indication that we have hit the "bottom" of our market, and there is only one way to go from that point.
The saying goes "buy low, sell high" and the opportunity for buying is now there. There is good inventory available in the housing market, prices are low (by any one's estimate), and money is being loaned to consumers at historically low rates.
Don't just take my word for it, ask any REALTOR or mortgage banker. "There has never been a better time to buy".
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