Should I buy now or wait?Posted on 03/25/10
The housing market is currently in a cyclical downturn. “NOW” is the time to buy and I will tell you why.
• Interest Rates are at historic lows. Rates as I write this are at 4.75% fixes for 30 year mortgage. This gives you more buying power or home for the price. When rates start to rise and they will this will give you instant equity in your home. Here is an example: you purchase a home for $200,000 and get a 30 year mortgage at 4.75% your P & I is $1043.29. Interest rates start back up to 6% and to keep the same payment you can only buy a home in the $175,000 range. Buying now gives you $25,000 instant equity.
• Home prices have decreased and in our area is currently 40-50% from the high prices of 2006. With all the foreclosures and short sales they have really drove the prices down and there are some great deals to be had.
• Large Inventory: The market being soft for the past 4 years has created what we call a buyer’s market. There are hundreds of homes to choose from and if sellers want to sell then their homes have to be in top notch shape, updated, landscaped and kept up to current style
• Tax Credit: New home buyers who buy before April 30, 2010 can qualify for up to $8,000 and other buyer’s buying a primary residence can qualify up to $6,500 from the IRS. This would be like living rent free in our $200,000 home from 6-8 months. What a deal. On top of that tax credit the IRS will also allow you to deduct any interest you pay on your mortgage.
Becoming a home owner is one of the greatest feelings you will ever experience. It’s your home to remodel, landscape, add a pool, fix it up the way you want to. Just knowing that you have made a great investment.