Milwaukee Condo & Real Estate Scene

The New York Times: It May Be Time to Think About Buying a House

Do you own a crystal ball? Can you predict when the right time comes along to purchase your next home? If you answered yes to either one of these questions, then please submit your resume.

Most buyers tend to wait to enter the market until the housing market improves. What does this mean? It means that most buyers may wait too long by trying to time the market. By doing so, they could miss the lowest prices available.

To many veteran real estate professionals the feeling of pessimism is generally associated with the reality of hitting rock bottom. How do you feel about the stock market and the current economy?

Rob Lieber, writer for the New York Times, suggests that “we do not know when this golden age will begin, because we will be able to identify the bottom to the housing market only with benefit of hindsight.”

When the market begins to show signs of improvement, will you look in the rearview mirror and realize that you missed a golden opportunity?

Many analysts feel that rock bottom is now. Housing prices have fallen which means homeownership is becoming much more affordable. Not only are housing prices down, but mortgage interest rates are also down – hovering around 5.5% for a 30-year fixed-rate mortgage. In addition, it was recently announced that the federal government might step in and will try to lower them further. How does 4.5% sound? I have heard this number being thrown around for real estate purchases.

Who are we counting on to turn the housing market around? First-time home buyers. Why? They have a single characteristic that all sellers find appealing: They don’t have a home to sell. The benefit? There is no domino effect with first-time home buyers which mean the parties are able to close as quickly as possible.

Lieber provides advice to first-time home buyers. First, start now to improve your credit score. Second, begin to save for your down payment. The more you pay down at closing will enable you to borrow at the most competitive interest rates. Third, begin to pay off any outstanding credit card balances. In addition, cancel any underused credit cards. Lieber says you should eliminate credit card debt months before your apply for a loan. Fourth, check the three major credit reports and dispute errors. However, I suggest that you don’t check these reports too often as the frequency will have an adverse affect on your credit score.

The easiest way to budget for your purchase is to sit down with a loan officer and discuss your available financial options. If you need any assistance in finding a loan officer to start the conversation, please don’t hesitate to contact me. I would be more than happy to point you in the right direction.

When is the right time to buy? Now! Traditionally, as the mercury drops, so does housing prices. This time of year, many buyers take a break from the real estate market. This means that there is more inventory and greater options available to those buyers who remain in the market. Advantage, buyers. With greater inventory levels and options, buyers have best bargaining power.

The Internal Revenue Service is also providing relief to first-time home buyers. If you are a first-time home buyer and you close on your new home before June 30, 2009, you will be entitled to a $7,500 federal tax “credit” (subject to income phase outs). Unlike other credits, this one will require you to pay it back. It works the same way as an interest-free loan.

To summarize, you can never time a bottoming out in the market place. If you think of your house purchase as a long-term investment, then you will find success with your investment over the long-term. With the stock market behaving so volatile in recent months, many home owners believe that their home is the best and safest investment they have in their portfolio.

What are your thoughts regarding the current real estate market? What concerns do you have with buying or selling real estate in this current market? Please post your questions or contact me at (414) 412-7980 or e-mail at dray@shorewest.com.

Lieber tackles the current issues in the current housing market and provides advice to today’s real estate purchasers. Click here to find out why now is a very good time to buy and what you can do to ensure locking-in on the most competitive interest rate possible>>>


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Labels: Economy, Finance, Real Estate

posted by David Ray @ 12:06 PM