Over the past 18 months, many people I've run into (that know I'm a Realtor) tell me they're afraid to buy a home now. With the economy taking a dive and home prices continuing to fall, it doesn't make sense to invest in a declining investment. Far fewer buyers are seeing a bright light at the end of a long tunnel. Yet, they are the ones who look at "these times" as the opportunity of a lifetime.
Right now, you're negotiating power is stronger than it ever has been. As the market begins to turn, that position diminishes. Now, it is still not beyond reasonable for you to ask for price reductions, closing costs and even improvements. And guess what, an extremely motivated seller is very likely to work with your demands.
I can identify many more reasons for buying a home now. In the interest of time, I've included my top 4 reasons:
1. Affordability is better than ever
NAR's (National Association of Realtors) housing affordability index as of December 2008, clearly communicates that homes are more affordable now than at any other point since the group started the index in 1970. In simplist terms, the relationship between home prices, mortgage interest rates and family income falls greatly in your favor.
2. Inventory is "busting" at the seams
After the past 7 years, of little inventory and multiple offers, we've realized a huge number of homes on the market and ready to sell. Like most of the United States, Southern California real Estate Time on Market has grown to months rather than days or weeks. Housing are taking a lot longer to sell, creating loads of inventory. Another factor, Foreclosures and distressed properties, have added tremendously to the inventory and have been a driving force for declining home prices to nearly 2001 levels in many places in Southern California.
Today, it is nearly impossible to time the bottom of the housing market, and even if you do, chances of making a HUGE profit is slim at best. As we climb out of this recession, many markets will not see the huge home-price gains they saw a few years ago.
3. Mortgage rates are extremely low
It's not just the price of the home that will affect affordability, mortgage terms will also effect your monthly payments. These days, rates are very attractive for conforming loas, those that can be purchased by mortgage agencies -- Fannie Mae and Freddie Mac. These daysthe current limit is $417,000, although that can rise to as high as $729,750 depending on various factors of the sale.
4. You can get a federal tax credit
There's now a federal credit line of up to $8,000 for home buyers who haven't owned a home in at least 3 years. Unlike the previous credit, this money doesn't have to be paid back. The extra cash will come in handy: The average first-time home buyer spends about $6,000 in the first 6 months of owning a home. Should you wait?
No. Waiting for further federal developments may zap a buyer's negotiating power, as more people get back in to the market and competition returns. The bottom line is this -- The more Washington gives, the demand for such products will increase.
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Dave HarbisonLong Beach REALTOR®
Coldwell Banker Coastal Alliance
(562) 494-4600 ext 2281
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Long Beach Realtor® / Real Estate AgentLong Beach Homes for Sale, Condos and Investment PropertiesLong Beach Relocation Expert---
Labels: Buy, Coldwell Banker Coastal Alliance, Homes, Real Estate, Realtor, Sell
# posted by
Dave Harbison @ 10:05 PM
