Is it Time to Buy?

Should I Buy Now?

Lesslie, I’m thinking of buying a house and am concerned about appreciation and how the housing market is changing.  What do you think?  Cliff D.

Cliff, this is s really good question.  The Urban Land Institute recently predicted two major changes in the U.S. housing market—very low appreciation of just 1-2% annually (probably for the next 4-5 years) and that the current rate of homeownership (down from an all time high of 69% to about 67% at present) will fall further to 62%. 

Appreciation is just one of the many factors to consider when buying a house, and there are so many others, like:

  • Your own financial situation:   (do you have enough of a down payment saved up to be comfortable with the mortgage and mortgage payment). 
  • The number of years you expect to be in the property.  It is not a good idea to buy right now if you are not planning to be in the house 5 years or more.
  • Pricing/affordability of Homes on the Market.
  • Inventory of Available Homes.
  • Interest rates and the availability of financing.
  • Have you calculated all of the expenses involved with buying a property—enough for taxes, insurance, maintenance and utilities?
  • Are you looking for interest and property tax deductions?
  • Are you able to take advantage of any of the buyers’ credits being offered?

One of the advantages of using a reputable Realtor, familiar with the area where you wish to purchase, is that he/she can give you some statistics as to appreciation, and assist you in analyzing the listings and sales.  Sometimes one neighborhood sells for more than another, or one tract of homes is more popular than another or has a different and more desirable school.  In addition they can guide you to reputable sources for financing and help you with an analysis of total costs.   Recently some studies were done that showed that often first time buyers have not calculated all of the future costs they will have—and that of course is an important element in deciding if, when and what to buy.

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