Is it a Great Time to Buy a Home?
Buying a home is a big decision. People buy because it is part of the American dream, provides stability and a higher level of contentment. Is now a great time to buy a home? It seems some of my prospective clients seem to think so.
My buyer clients have been a lot more active in the last week. It started with a couple who have been receiving listings since February and who I had shown around 35-40 homes over 4 months, found a home for sale in Tinley Park that they liked at the right price and we're scheduled to close November 30. They are first time buyers.
My 2nd offer I wrote is currently still being negotiated but my buyers again found a home for sale in Joliet that was well priced. This one needs some updating as it is an estate sale and it appears some of the appliances and mechanicals are original 1960 edtions. They have been about 2 months in getting to the point of buying.
I also showed a home to another couple today and I think that they will probably make an offer tomorrow or Saturday. They have a home that does not have to be sold as it is paid off and they may decide to rent or sell it once they move into a new home. These buyers seem to be ready now because of the low rates (4.25% for a 30 yr) and prices having come down substantially. The home for sale in Bolingbrook that they found has been lowered by over $100,000 over the last 3 years that it has been for sale.
Today, I also finally talked to a couple who have been receiving listings since February (over 8 months). A few times we had communicated via email but never by phone. They seem to be ready to buy now and have indicated interest in several homes. We are planning on seeing homes for sale in Richton Park and University Park next week.
I also have around 20 potential buyers who have logged in to view MLS listings that I've sent them as part of their daily home search updates. Many of them will buy a home in the coming year. Some of them have to improve credit scores, others need to save for a down payment. Some are just waiting for the right time.
Earlier today, I read an article emailed to me from Trulia, "6 Reasons Buyers aren't Biting". The author cited perceived difficulty in qualifying for a mortgage, fear of foreclosure (which dominate many real estate markets), waiting for 'shadow invntory' to be released by banks, buyers waiting for the bottom, high levels of unemployment and needing to keep options open as reasons why buyers aren't buying. It also provided tips for sellers to overcome the obstacles.
I think buyers who are capable and comfortable buying now, should consider that prices are at or very near the bottom (barring major bad news in the housing market) and interest rates are historically low. Locking in a home at these interest rates and prices could be the smartest long term decision that someone could make. A $300,000 home, purchased with 20% down at 4.25% interest rate, would have a monthly principle and interest payment of $1180.66. A buyer who waits too long and pays just 5% more with a 1% higher interest rate would have a payment that is $210.89 more every month. Over 30 years that translates into almost $76,000. Thats a lot of money.
In 10 years, the housing bubble will be a distant memory and interest rates will likely be back to more 'normal' levels. Buying now could be the smartest move you'll ever make.
Is it a Great Time to Buy a Home?