Real estate is a cyclical business. Whether it’s shifting from a buyers to a sellers market; a sellers to a buyers market or even from the
Summer months to the Winter ones – the national and local real estate landscape is ever-changing. Even just this year we watched the real estate landscape rise and fall. Take for example, the first-time homebuyer tax credit which received much acclaim earlier this year as it helped to stimulate the sales of homes during an otherwise stale market. We even witnessed several extensions and expansions on the tax credit because of its success in increasing home ownership in the United States. As a result of the tax credit – and as predicted – sales were on the rise and the economy appeared to be trending toward stabilization. Then July statistics hit and existing home sales dropped sharply, while home prices continued to gain.
Since then, the media has focused on the doom and gloom of a few housing statistics that only represent a portion of the picture. As a Realtor, I’m happy to tell you that, for the right individual, owning a home is still one of the best investments you can make in your lifetime.
And now couldn’t be a better time to buy. Lawrence Yun, Chief Economist of The National Association of REALTORS couldn’t agree
more. Not too long ago, he said “Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. Affordability could reach a generational high this year because of rock-bottom mortgage interest rates, helped partly by the Fed’s very accommodative monetary policy.”
If you’re waiting to buy I home, I urge you to take a minute to consider the following benefits of buying now – there may not ever be a better opportunity than the one we presently face to purchase a home. Here are a few of the reasons why it is the best time to purchase now.
1. Affordability
Housing affordability is at a generational high and has been steadily stabilizing since the boom years of 2006. Affordability, as measured by the median mortgage payment as a percentage of median household income, continues on a downward trend – meaning home ownership is within reach for more Americans.
2. All-time low mortgage rates
Rates are reaching generational lows due to monetary policy and won’t stay there for long. If you take into consideration the decrease in home prices, you have good credit, and you can put money down on the home, buying now, instead of later, is a good option.
3. There are lots of deals
Recently, the National Association of REALTORS put total inventory at 4 million homes. Of those homes, nearly 40 percent are estimated to be foreclosures. These aren’t your run-down foreclosed upon homes, either. Unfortunately, many homeowners fell underwater on their mortgage due to the decline in the economy. As a buyer, you’re able to help them get out from under a home they can’t afford and into a home for a great price.
4. Sellers are generally ready to negotiate
When supply exceeds demand – which has been the case for some time now – buyers gain the upper hand in negotiations. Current supply of homes are up, which means that homes could potentially sit on the market for an extended period of time. If a seller needs to move quickly due to a job relocation, or because they can no longer afford their home, they’ll most likely compete for your business on a monetary level.
5. Ahh, the American Dream
As I’m sure you’ve heard, owning a home is one of the best investments you can make. It’s absolutely true. Even during the decline in the economy, a recent Fannie Mae study revealed that more than half of Americans still consider housing to be a safe investment! If you plan to stay in your home for several years – enough time for it to appreciate in value or more than five years – then there’s really never a BAD time to buy a home.
Warren Buffet, the great investor once said: “Be greedy when others are fearful and fearful when others are greedy.” Buying a home IS an emotional endeavor, and always takes careful planning and preparation. If you’re confident in your ability to purchase a home – don’t wait -demand always catches up with supply – after all – real estate is a cyclical business.