Although it is very unfortunate that a lot of people have lost their homes in this market through foreclosures and short sales, this is the time when first time buyers should jump in and buy. Waiting too long might cost you to miss the boat again. Times like this don't come around very often. Interest rates are still very low with one digit numbers. Remember the 80's when interest rates got close to 20%. Low interest rates translate to more home affordability and increase the buyer's purchasing power. Waiting to see if the market is going to decrease more could end up costing you more if interest rates start heading up. Home values have already been adjusted back a big percentage depending on the local area. More people can now afford the same house that was listed couple years ago. I already started seeing investors coming back to invest in the US real estate market and a lot of them are foreign investors. If this continues it will lead to more demand, less inventories and higher prices. Overall investing in real estate is a great venue to building wealth. Just remember these quotes:
- In 1947 when the average price of a home was under $10,000: "The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline" Time Magazine
- In 1969 when the average price of a home was under $30,000: "The goal of owning a home seems to be getting beyond the reach of more and more Americans" Business Week
- In 1981 when the average price of a home was under $100,000: "The era of easy profits in real estate may be drawing to a close" Money Magazine
- In 1985 when the average price of a home was above $100,000: "If you are looking to buy, be careful. Rising home values are not a sure thing anymore" Miami Herald
- In 1986 when the average price of a home was above $100,000: "Most economists agree... a home will become little more than a roof and a tax deduction, certainly not the lucrative investment it was..." Money Magazine
- In 1993 when the average price of a home was a little under $200,000: "Financial planners agree that houses will continue to be a poor investment" Kiplinger's Personal Financial Magazine
- In 1996 when the average of a home in San Francisco was $250,000: "A home is where a bad investment is" San Francisco Examiner. Ten years later the average price of a home in San Francisco was $750,000. Was that a bad investment?
What would I do if I have some cash now?
Invest ... invest ... invest in real estate.