Jim Gillespie from CNBC.com recently had this encouraging news about the real estate market. You can find the article on CNBC.com here.
The Best Time to Buy Real Estate is Now
The real estate market is the best I have seen in my 33+ years in real estate for buyers, whether they are buying for lifestyle to move in with their families or for buying for investment. There are four main reasons why I say this:
First – The interest rates are still near 40 year historic lows. Rates continue to be well under 7%.
Second – There are more homes for sale than we have had for decades – therefore there is much more to choose from as a buyer.
Third – Prices are stable in the heartland of the USA and in several states, California, Florida, Nevada and Arizona as well as the rust belt of Michigan, Indiana and Ohio the prices have dropped enough that the smart buyers are beginning to jump back in the market to take advantage of the lower prices.
The fourth and final reason that now is the best time to buy is – affordability. According to the National Association of Realtors, the trade organization for Realtors, we are at near a 5 year low in affordability. In addition, Wachovia published a paper on real estate on July 14 of this year comparing the median price of homes in the USA with the disposable income our citizens have, according to the US Department of Commerce. They found that the worst affordability was three years ago and the best was August, 1980. Today they report that we are near that 28 year low. Now is the best time to buy real estate!!!!!
One other factor to consider is that according to the National Association of Realtors the average median increase in home values in our country since 1972 is 6.2%. What a great annual return on your investment.
Buying for investment is a little different than buying to live in. If you are investing, make sure you work with a professional Realtor who not only knows the local market, but invests in real estate themselves. Then take the emotion out of the purchase. Worry about the age of the roof, appliances, furnace, air conditioning units, water heater, etc as well as the type of construction to determine what kind of building maintenance would need to be done. Do not worry about things like what the backyard looks like from the window over the kitchen sink. Don’t worry about what it would be like if the back yard would not be ideal for your children.
You should also have your sales person provide you with comparable sales that have recently been sold so you are aware of values and do not bid or purchase an overpriced home.