Home Buyers Relocation’s Weblog

Could this be the time to buy?

The following article is quoted in its entirety.  It was written and published by Amy Hoak, in Market Watch, recently.  It’s a great summary and we generally agree, except that the comments about new home construction does not prevail in our community.  That was worked off a year ago.  Builders are back to building “inventory” homes, but they are not ahead of the real market at all.Could this actually be the best time to buy? It may be moment you’re looking for By Amy HoakMarketWatch CHICAGO—People are afraid to buy a home in times like these, with the economy tanking and home prices continuing to fall.  But if you’re brave enough to stray from the herd, you might be in for the home-buying opportunity of a lifetime. Ask for price reductions, improvements, closing costs—whatever—and the seller, desperately trying to get a contract, is very likely to work with you, said Jay Papasan, one of authors of the book “Your First Home.”  When the market starts improving, your negotiating power starts to diminish, he added. If you’re qualified to buy a home now, the purchase makes sense for your situation and you’re prepared to live in that home for at least five years, there are reasons why you may be headed for a great deal: 1.  Affordability is better than ever.According to the National Association of Realtors’ housing affordability index, homes were more affordable in December than at any other point since the group started the index in 1970.  The affordability index is a measure of the relationship between home prices, mortgage interest rates and family income. John and Julie Chilman, for example, recently have been able to stretch their dollars in the

Las Vegas area.  The listing price for the five-bedroom home they’re buying was $265,000; they offered $250,000. “Our Realtor was like `Yeah, pipe dream. Like they’re going to take that,’” John Chilman said.  “And all they did was counter $255,000 … and they’re paying all closing costs.” The home had lingered on the market, and was listed for $310,000 just six months ago, he said. 2.  You have a large inventory to choose from.In many places it is taking months to sell a home, creating loads of inventory — from new homes to existing homes to foreclosures.  There was a 12.9-month supply of inventory in December given that month’s sales pace, according to NAR.  A large selection gives buyers more choices and drives down prices.  And home sellers have gotten the picture. 3.  Builders are offering big discounts.Homebuilders are getting even more aggressive with their pricing.  In fact, Fadel recommends looking at completed new homes first because builders are offering such steep discounts.  Plus, you’d have a warranty not only on the home itself, but also on the home’s appliances, he said. 4.   Mortgage rates are historically low.It’s not just the price of the home that will affect affordability; mortgage terms will also affect your monthly payments. 

This entry was posted on Saturday, July 10th, 2010 at 4:54 pm and is filed under Buying Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.