Fear usually wins out when stacked up against the desire for personal gain. Fear is often rooted in lack of knowledge, and while many seek out the information needed to make informed decisions, a many others don't know where to turn. The result: they stick with the status quo. But is "status quo" always the safest, smartest approach?
For every time a potential homebuyer hears it's a great time to buy, they hear a horror story: a friend who is going through foreclosure, another who is way "underwater" on their mortgage. These true stories are all around us, and we can't help but take notice. Thus, fear of the unknown can sometimes discourage, and many buyers head towards "the fence" to sit and see how things will play themselves out in this market.
Buying a home right now certainly isn't right for everyone. However, for many, it's the ideal next step. But you may say, "what about the home prices that continue to decline? Wouldn't it be foolish to buy now what I can get for thousands of dollars a few years later". My answer: maybe, maybe not.
Sure, in most markets we have not reached the bottom yet, but one key stat that that the rate of decline has slowed. Here in the Puget Sound area, personally I believe values will continue to drop for another couple of years, at a rate up to 3%. Then I believe our local market we'll likely see the values start inching back up in towards the end of 2013.
So let's take a renter who is paying $1300 right now. They are pre-approved to buy a $220k home at the same approx payment as their monthly rent, and are ready to buy for all the right reasons, but decide to wait the market out. Fast forward 3 years, they've just closed on a similar home in they same neighborhood for $15,000 less than they would have paid 3 years earlier. However, it cost them more than $45,000 in rent payments over that time. Was it the smartest move? Maybe, maybe not.
Here's my point: buying a home is the largest purchase many of us will make in our lifetimes,and shouldn't be based on a conversation we over-heard at the water-cooler. I encourage everyone not "to run with the herd", but to obtain as much knowledge and information as you can, to make an informed decision.
One of the best ways to obtain more knowledge is take advantage of a free homebuyer education class in your area.
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