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Is now a good time to buy a home?

October 22, 2008

 
 

The answer to this is a resounding “YES!”

With all of the bad news going around there are certainly things to be concerned about. However, these are also the times where the level headed people of the world see opportunity. They don’t allow themselves to be consumed by the hype of the day no matter how loud or massive the hype becomes.

Instead they weigh the facts, consider the pros and cons, and make decisions based on their findings not their emmotions or what the masses are yelling in their ears.

In looking at the current real estate climate people should be level headed and consider the facts, not the hype. So lets look at the question many people have about the current real estate market:

Is it a bad time to invest in real estate right now?”

The Warren Buffetts of the world work off of the basic economic principle of “Buy Low & Sell High”. It seems so simple but when faced with the decision of whether to buy or sell people tend to let their emmotions get the best of them. The thought process goes something like this…

 

“Sell now? But the market has been sky-rocketing for 3 years! I’d be a fool to get out now!”

or…

“Buy now? But the bottom has been falling out of this market for the last 18 months! I’d be a fool to buy something and lose more!”

 

Panic and greed often get in the way of sound decision making.

The truth is that this is not only a good time, this is the time to invest. If part of your economic plan involves purchasing real estate and if you have some money to grow, plant it!

Here is what you have going in your favor:

1. Excellent Mortgage Rates:

Mortgage Rates are still very low and they will most likely increase throughout 2009, meaning you will get less house for the same amount of money in the coming year.

2. High Supply:

Real Estate Inventory is very high throughout Western Washington. For Buyers, that means more to choose from, and more of a spirit of cooperation from Sellers who are anxious to get their homes sold.

 

3. Fewer Buyers to Compete with:

Pretty self-explanitory. The basic law of supply and demand. When supply is high and demand is low prices drop.

4. There is money to lend:

Contrary to the constant media barrage about the lack of money and the credit crisis there is still money to lend. The fact is that though there are many banks and lenders falling apart, there are also still plenty of solvent, and reasonable lending institutions out there that want to loan money. If you have a job and good credit and can varify it, you can most likely get a home loan for as little as 3% down.

 

5. Economic Forecasts Point to an up-swing in 2009:

Both nationally and locally the real estate market is forecasts to grow in 2009.

In Seattle, we are expected to see a 10% growth in real estate sales in 2009, particularly in the second half of the year. If we are not at the bottom of the market, we are certainly near it and now is the right time to start investing before prices start going up again.

So you see, if your job is secure and you’ve been thinking about buying a home or investment property, this is a great time to do it!

 

Don’t let your fear get in the way. Get the facts, weigh the pros & cons so that YOU can make the decision whether this is the right time for you regardless of the hype.

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2 Comments leave one →
  1. Pat permalink
    December 10, 2008 1:00 am

    I’m not sure now is the right time to buy if you have a choice.

    The projected bottom of the national US market is from June ’09 to Spring ’10. The Washington and Oregon market tends to lag the national market by 6 months to a year.

    Interest rate are likely to stay the same or go lower in the next year and a half. So I think that a good opportunity to buy a house is now, but a better opportunity will likely occur in a year or so.

  2. Ted Dietz permalink
    December 11, 2008 9:37 pm

    Hey Pat,

    Thanks for your comments.

    When I wrote this article originally, the information I was receiving was that rates were going to be on the rise in the new year.

    Now, as you mentioned, they look as though they will either drop or remain relatively similar to what they are now. Today I’ve seen rates at 4.875% for a 30 year fixed (5.069% APR).

    According to our attorney, there was information leaked last week that there was a proposal on the table to drop rates to as low as 3%!

    It seems more realistic to me that we will see rates drop to where Bernanke has been proposing at around 4.5%.

    As for the where the bottom of the market is… nobody knows. The report I mentioned in my original article still has the most sway with me. I do believe that some time next summer we will see the beginnings of recovery in the Seattle area.

    Either way I think it is a bad practice in general to try and time the bottom of any market, particularly with housing.

    I do think prices will continue to fall for the next few months. April through June should be interesting. The numbers for June through September will be particularly telling.

    The fact of the matter is we don’t know when things are going to change and conditions are such that make it an optimal time to buy.

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