Okay - I admit that I like selling homes, and I like helping people like you find a new home that is that perfect match and a good investment for you. I came across the following remarkable quote from the author, David Bach, which says, "The average homeowner is worth 35 times more than the average renter." If that is true, then that is an amazing statistic!
David Bach advises renters to take action immediately and start saving part of their paycheck every month to help accumulate a down payment. He also encourages renters to borrow 10-20 percent less than what the bank is willing to lend; that way they're only buying as much home as they can afford. (I promise as a point of honor that I never will push you to buy more than that which your comfort level allows.)
The longer you rent, the longer it may take you to eventually get into homeownership. If the market conditions have scared you, perhaps you're not looking at the other side of the coin. Even though you are buying a home for shelter and emotional factors, owning a home still becomes part of your investment portfolio, provides tax benefits, allows you to build equity (it still exists), and, if you buy now, you may get an excellent deal.
However, it is a scary time to jump into the market. As the Washington Post has continually noted, buyers are sitting on the fence, waiting for something to change. In fact, someone recently told me that they were still casually looking for a home, but planning to make a purchase in 6 months since property values were going to continue to go down.
Now, I absolutely agree that property values probably are going to stay soft. Certainly, I don’t expect prices to start to turn up for quite a while – years in fact. However, I don’t agree that waiting is necessarily the best approach.
According to a MarketWatch news article, buying a home now can provide some real negotiating power to request improvements, price reductions, help with closing costs, and more. "People can get a lot of what they need and almost all of what they want today," said Jay Papasan, one of the authors of "Your First Home".
While poor market conditions have created a troubling situation for some homeowners, the downturn has made the buying market ripe for others. The affordability of homes is better than ever. The National Association of Realtors' housing affordability index concluded that homes in December of 2008 were more affordable than at any other point since 1970 (the start of the index). And with numerous foreclosures on the market and prices dropping in many areas, now is a good time to buy. But in order to make your purchase profitable, here are some things you should consider.
How long will you be in the home? Some experts advise that if you are planning to move within a year or even two years, buying may not be the best option because of the expenses associated with moving. However, if you're searching for a place to live for, at least, several years, buying now could be a good choice for you, particularly if you buy a property that has good rental potential in case your plans change unexpectedly.
How much you can afford. Don't let tighter lending regulations scare you off from making a purchase. Instead, understand what you truly can afford. Don't get caught up in buying too much home. In fact, these days, the trend is moving toward smaller homes - simpler living.
Mortgage rates drop to historical low. How much home you can afford is affected by mortgage interest rates that, right now, are highly appealing. Good credit, documenting your income, and a substantial down payment will make you a better candidate for the better mortgage rates.
Freedom to choose. Now, unlike several years ago, the market has a large inventory in many areas. The market time to sell a home has increased which creates a large inventory of homes, everything including new, existing, and foreclosures. Buyers can peruse the market and have the freedom to select the home they really want. If you're interest is in a new home, know that many developers are getting more competitive with their pricing because they also have taken a hit by the ailing economy.
Quality of life. Buying a home can create a higher quality of life, giving you pride of homeownership, and something to enjoy improving and developing over the years.
Tax credit benefit. The American Recovery and Reinvestment Act of 2009 provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1.
There are lots of opportunities out there. Last night I saw a new listing just posted - a 2 bedroom 2 bath condo on 13th St. near M St. It is a foreclosure listed for $339,900 - 1000 sq ft - loft style. A one bedroom in the same building sold in October for $333,000- but was only 680 sq. ft. The foreclosure is being sold as is and is a perfect candidate for a loan that includes renovation financing. (That is the building at the top of this blog.)
So - if you are ready to take advantage of this very interesting market, just give me a call. I will be glad to help you find your dream home.
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