I recently read an article, Five reasons buying a home now is a bad idea, whose author gave 5 reasons not to buy a home right now. It is this type of negative publicity that is making these difficult times even tougher on the economy. The same article projects the market to continue to slump for another 10-16 months. If everyone shared the author’s negative view, I could see why it would take so long for the economy to recover. Those thoughts sound to me as if the author has her finger on the panic button. The real problem is that the public perception and consumer confidence has been severely diminished by the negative media that is being dished out.
Let’s look at this from a different angle. What if I told you that the economy was in the toilet and instead of suggesting that we try to stimulate or revive it, I recommend that we all hunker down and wait it out. Everyone should just stop spending money as much as possible or at least until merchants and service providers start giving everything away. We should all go back to the days when people raised livestock, grew their own vegetables and made their own clothes. How many jobs would that save? How many marriages? How many lives? Well, I don’t think it would do much to help the economy either.
With that said, allow me to offer my real world perspective and give you 5 reasons you should buy a home, right now.
1. Mortgage rates are near record lows. – Waiting to see if home prices will drop any further may increase the risk of mortgage rates creeping up higher. A rate increase of 1% can be the same as adding $10,000 to the purchase price of a new home. Considering median prices in most areas vary from $150,000 to $200,000, you would need to expect another 5-7.5% reduction or more in home prices to benefit should the rates go up a full percent between now and the time you decide to buy.
2. How low will they go? – Some markets are already much lower than they were a couple of years ago. Keep in mind that these are the same markets that saw huge increases before the housing bubble burst. In fact, home prices are back in line with where they should be if you take in to account a steady growth rate of appreciation. The housing bubble caused a spike in the normal growth rate and eventually led to the severe downturn we are experiencing now. But is it really a downturn or a righting of the ship, putting us back on the course we should have been on all along.
3. Timing is everything – The person who wrote the article suggests the best strategy is to wait until the market has bottomed out before making your move. Good advice except for the fact that, unless you’re a psychic, no one knows when the market has hit bottom until it starts rising up again. By then it’s too late and you’ve missed it.
4. Choices, choices, choices – Given the decline in homes being bought and a steady increase of homes on the market, the choices available are mind-blowing. In a seller’s market, there is usually not much to choose from, therefore they can ask for more money. In today’s buyer’s market you can have your pick. You will find plenty of homes in top condition with lots of extras in desirable locations and at very reasonable prices. What more could you ask for?
5. Help your fellow citizen - The government knows that the best way to stimulate the economy is to get people to spend money. This will create a domino effect that will allow retailers, manufacturers and others to create jobs, thus put more money into the economy. It’s a cycle. The same with housing. There are many homeowners out there that are struggling financially and need to sell their current homes in order to free up their own cash flow, reduce debt or relocate to a new job. By buying one of these homes you would be, in part, stimulating the economy. How cool is that to take part in the American dream and help out at the same time?
Regardless of your season of life, there are good honest REALTORS that would love to help you realize your dreams of owning a home. I know many of those REALTORS and they put the “real” back in real estate. They service many parts of Central New York, however if you are not in my area please keep in mind that part of their job is putting people all across the United States and Canada in touch with a real estate agent that will provide honest, dependable service.
Whether you or someone you know is thinking of buying or selling a home. Call a Realtor first, or leave a comment here and I will have a Realtor contact you!