Now really is the time to buy Real Estate and I state this, not just as a professional in the field, but as an individual with both historic perspective and a strong economics background. Houses are on sale everywhere. Fair Market Value is only being paid for entry level homes and then only in the hottest of micro-markets. Most houses are selling at discounts of up to 50% of FMV. In my little corner of the world, Port Washington entry level homes are selling on a par with FMV but in nearby Sheboygan, 50% of FMV is not uncommon.
The other huge variable in home ownership is the interest rate paid on a conventional 30 year mortgage. Rates now are at the bottom of the 30 year range. Can they go lower? Anything can happen but you need to go and do your own homework. Check out 1970 through 1990 and you will find that spikes in rates have very long tails.
But the real carrot is the amount of money to be had from the Treasury Dept. When was the last time that you could get an extra $6500 to 8,000 raise in your own income tax return? Answer never and you are probably spot on.
I agree this is a good time to buy a home if you can afford to but to state that homes are selling for 50% of fair market value (FMV) is misleading when the truth is the FMV is half of what it once was. Semantics, I know but the way you state it seems like a buyer is getting a great deal with untapped equity when in reality they are purchasing something that is more affordable and with no equity.
I think you may be right. Of course much depends on one's employment prospects. There is still a risk of price decline in some markets so be prepared to stay where you are for some years. It's hard to say what's going to happen in the future but I'm betting interest rates will rise considerably which can lower home prices and shrink demand. The good news is we'll likely see very high inflation and home ownership can offset this. The best thing to do now is buy rural land, gold, and guns and construct cabin on a high point clearing that can be easily defended.
I agree. The convergence of three factors never seen in the real estate industry. Historically low interest rates, affordable prices and a tax credit. If you qualify and want to buy, there will never by a better time.
Its about the naked girl with the guitar.....oh, sorry about that. You have to buy in places where there is a hope for a recovery. Case and point.........the most stable RE price index in the US is Cleveland OH. Why? Because prices barely changed in the past 10 years. They barely went up during the boom and have gone down slighty in the recession.
Is it a good market to buy? Well, it depends on what you want. If you just want to get a tax brake forever until you sell without much risk of depreciation, go for it. If you want appreciation, run away.
If you want to make a killing, buy somewhere close to a place where property values were sick just 2 years ago that are near the ocean. Simple yes but true. A large metro center by the ocean is prime real estate always in the USA. Do not buy inland and do not by rural. Stay suburban or urban near a strong economic centered city. My picks?
CA: Orange County, LA, San Diego, San Francisco East Bay,
FL: Orlando (Only because of Disneyworld), Miami, Jacksonville
NC: Chapel Hill
Essentially, if you buy in a place right now near a good area that is has dropped by 50% or more, you are going to be safe for a long time to come. If you want to make money, pay a little more to be in a better area. Its a once in a lifetime opportunity as many intellegent people already mentioned regarding low rates, cheap prices, and government rebates.
Equity Coalition President
San Francisco, CA 94121
415 680 3454
by Sekharg6 years ago
I see lot of houses for sale.I heard interest rates are lowest.Is it a good idea to buy a house now?What do you think?
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