With housing prices continuing a downward spiral (housing analysts expect the prices to drop another 8% this year), it might seem to some that it is not a good time to buy a house. Why not wait until the market is more stabilized? Here’s why:
It’s a vicious cycle.
In the words of Mike Castleman, Sr. of Metrostudy, we are “not suffering from what would normally be considered an oversupply of housing– [we’re] suffering from tremendous underdemand” (Bottome Line Personal, Volume 32 Number 14, page 5). What has happened is that people lost their jobs, so homes went into foreclosures and shortsales, so many people couldn’t afford new homes, so the demand of homes fell, so the prices of homes fell, so more people started to worry about the declining prices of homes, so less people are buying houses, so the prices continue to fall… and on and on it goes.
So take the plunge! Worried about the lack of jobs? The job market is picking up. Worried about mortgages? It’s true, companies are lending less. But it is optimistic that more people will be able to obtain mortgages because the government wants to boost the economy. For those with a mortgage, even if the house values continue to fall, interest rates today are incredibly low, so even if they do increase, your mortgage payments will be just about the same. Worried about “[tying yourself] to a declining asset”? Rent rates are beginning to exceed the cost of owning a home, so more people are starting to buy instead of rent.
The bottom line is: now is the time to buy a house! What are you waiting for? Give me an email at jamie@sunvalleylife.com to start looking for your new home today!