Why Is This Still a Good Time to Buy Real Estate?

Even though it may be too late to take advantage of the First Time Home Buyer $8000 Tax Credit Program, if you aren't already in escrow, it's still a very good time to buy for other reasons.

1. Property prices are the lowest they've been since the peak of the market in 2007. Inventory levels dropped to 1998 levels early in 2009, but they've begun to improve to levels in 2000. This has caused prices to slow down in the rate of decrease. While prices are still decreasing, it's at a much lower rate than previously.

As an example, single family home median prices year to date are down 16.2% vs prior year. However, in Sept, they were down only 8%. Condo prices are down 10.8% year to date, but in September, they were down only 7.7%. This would indicate that there isn't a significant advantage to getting a much lower price by waiting.

2. Interest rates are still under 5%. This may not last much longer since the Fed is planning a slowdown in the level of purchasing mortgage backed securities (MBS) until the program ends early next year. These purchases have been artificially keeping interest rates down. Interest rates will begin to rise once this program begins cutting back and eventually end.

3. With the artificially low interest rates, buyers experience increased PURCHASING POWER. This will decrease when interest rates begin to rise.

4. FHA loans are still available with as little as 3.5% down. Down payments have the flexibility of being provided by other than the Buyer's resources. (ie, the use of gifted funds, etc.) Current discussions are in progress about increasing the minimum down payment for this program.

5. The eventual appreciation in value and the advantage of interest deductions on taxes are other POSITIVE factors that make this still a good time for purchasing real estate.

For assistance in finding your new home, contact Dwight Ellis at 808 351-1507 for a free HOME BUYER consultation!