Is Right Now The Time To Buy Real Estate?
- The economy is still in a state of turmoil. A lot of people are thinking that it is not the right time to make major investment moves. That thinking could be your downfall. Much of the housing news lately has been depressing. All of this talk of foreclosures and short sales and unsold inventory, it seems like a never ending battle. The reality is that when all of the talk is about how the market is booming, it is already too late to get in at the ground floor! Waiting may not be the best strategy anymore.
- Home buying is not for everyone. There are risks involved and knowing the right market is key. I recommend that you look at markets with lower than average unemployment. It is my opinion that that is what will drive us out of this downturn. Once the unemployment numbers start to stabilize, the markets are soon to follow. Consumer confidence is lost in an economy that can’t support jobs. Once the long time unemployed masses start receiving a steady paycheck once again, the housing market will bounce back.
- Real estate historically appreciates overtime. Let’s look at home prices. If you bought a home today for $235,000, it will be worth $485,000 at 3% annual appreciation after 30 years. At 4% annual appreciation the same home will be worth $649,000. According to the U.S. Census Bureau, the price of new homes increased nationally by an average of 5.4% annually from 1963 to 2008. The National Association of REALTORS® reports that the price of existing homes increased by the same 5.4% per year over the same period. 2009 was a year that showed significant price reductions. In some markets in the range of 30%! I may be wrong, but the way I look at it, now home prices are below the curve.
- Thehousing market is showing signs of recovery, and in some areas, signs of price increases. Along with the fact that interest rates are incredibly low and the federal government is offering up to $8,000 for homebuyers (see my article from Nov. 24 titled, Extended $8,000 1st time home buyer credit, and you!) These are all reasons to look seriously at real estate. But, I feel that the number one reason to get back into real estate is that there is an incredibly large number of homes in distressed situations. By distressed, I mean financial distress. There are more and more homes going into foreclosure and many more banks now that are willing to negotiate short sales as an alternative to foreclosure. These homes are where you find the deals. Sometimes priced 10% to 15% to even 30% below market! It has been decades since this type of opportunity has presented itself.
- So, to answer the question, “is it the right time to buy real estate?” I believe the answer is clear.
- Go to www.metrodenvershortsalesonline.com to get more information about Short Sale transactions and to get further information on where to get started.
- Investing in the real estate market has risks and is not for everyone. I am, by no means, suggesting this is for you. I am a trained professional; I do this for a living. If you would like more information regarding real estate investment, just let me know. You can also consult your accountant, attorney, Priest, Pastor, or Rabbi about the risks involved in investing. I am, however, available to answer your real estate related questions. www.jhansen.biz
