So... Is It Really A Good Time To Buy A Home?

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"...the prices aren't likely to go much lower... Overall, though, I can't imagine a better time to buy than now." WSJ 9-1-09

Real Article
Because markets vary greatly by zip code and price range, consulting a local real estate professional for current statistics on your particular area of interest and price range is the best place to start. As of the beginning of August 2009, even the national media has begun to report that home prices have finally bottomed out, which is what many buyers have been waiting for.  A September 1st article in the Wall Street Journal indicates that statistics show pricing hit bottom last Spring.  (see In The News or September 1st article).  For buyers on the fence, there hasn't been a better time.

First-time home buyers may be entitled to an $8,000.00 tax credit, which also applies to those who have not owned a home in the past 3 years. This tax credit is an actual dollar-for-dollar reduction in your taxes, not a reduction in your taxable income. But hurry... time is running out to take advantage. In order to receive the credit, you must settle on the home by November 30, 2009, which means you should be in a contract by the beginning of October.
 

Some Simple Truths And Calculations:
With the rare combination of low interest rates (currently in the mid-5 percents) and prices at stable lows, this is the perfect time to buy in our area. Trying to "time the market" , thinking you will get a better deal by waiting to see if things go lower, is much like gambling and carries the same risks. Those who focus only on price without taking advantage of current inexpensive financing could be making a long-term mistake.
EXAMPLE:
Say you get a good purchase price on a home now for $400,000 with 10% down at 5.5% for 30 years. Your monthly principal and interest payment will be $2,044.04.

Now lets assume you wait a year and the market does drop by 5% in the next year, and interest rates rise by only 1%. That's a purchase price of $380,000 with 10% down at 6.5% (still a great rate) for 30 years. Your monthly principal and interest payment has risen to $2,161.67.
That's nearly $120.00 per month MORE, with no homeownership benefits for the year you waited. The higher the price of the house, the greater the impact the interest rate rise will have. Saavy investors in any market recognize good opportunities and realize that waiting for the best of all possible deals is more a stroke of luck that, more often than not, results in a missed opportunity.

Real estate is still the safest long-term investment available, affording additional benefits of homeownership and opportunity for equity building. Don't let fear keep you from taking advantage of current opportunities. I'm sure there will be many people in the coming years who will wish they had not been afraid to act at this opportune time.

Contact me with questions, for current market statistics, and a free evaluation of your home
in Bucks, Mercer & Hunterdon Counties

 

 

Jeff Macdonell, Realtor/Partner   Phone: (215) 862-0900   Mobile: (609) 658-8602   Fax: (215) 862-1257   Email