Your Dream House Can Come True Now
As foreclosures and short sales continue to put pressure on the home prices will also be a buyer's market. This means that there is a great opportunity in real estate ownership unlike any we have seen in quite a long time. Home prices are down, interest rates remain near historical lows, and inventory is high. Those with stable jobs and good credit can find their dream home, pay a price lower than any time in the last five or more years, finance it at a very favorable interest rate. Most people who shopped for a home in 2005 and 2006 recall how difficult it was to find a dream home at a price they considered affordable with so few properties available. According to the National Association of Realtors, the inventory of existing homes for sale peaked in November of 2008 at an 11 months' supply. There was a 9.6 month supply at the end of May 2009 and it has fallen since then. While you think your dream home will remain on the market forever the selection is shrinking fast.
If we all knew the future, we would time our purchases by buying at the bottom of every pricing cycle. However, since we don't well all know that most of us are no better at picking bottoms than we are at selling tops. NAR statistics indicate that the national average for existing home sale prices peaked at $230,200 in July of 2006. In January of 2009, its lowest point, the average fell to $164,800, down 28.3% from its peak. Since then, despite foreclosures still making up a significant portion of the transactions, the average price has slowly climbed each month. It stood at $173,000 at the end of May 2009. Also, mortgage rates have been near historic lows. The unemployment rate is still high but the rate of people losing their jobs is slowing. And it's reasonable to expect an increase in inflation to also include an increase in home prices.
What this all mean? It means that we are at a unique point in time within the realm of residential real estate. There are some terrific homes on the market today, at prices historically quite low, with attractive interest rates available. What does this mean to you? If you don't yet own a home, or if you own a home and have been considering trading up, now is a great time to go shopping.
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