Is Now Really A Good Time To Buy A Home?

Real estate news headlines still continue to be incredibly confusing. One day newspapers are reporting that home prices are continuing to fall while the next they claim it is a great time to buy a home. So is now really a good time to buy a home or is it better to wait?

There is no doubt that the real estate market all over the country from Worcester, MA to Miami, FL to Los Angeles, CA is packed with great real estate bargains. The problem with trying to interpret the news headlines is that they often look at things on a nationwide level or the statistics are based on flawed calculations. You have heard it before but it remains more true than ever ‘real estate is local’. For instance this week the same source reported that Boston, Massachusetts was both one of the best real estate markets with a 14% rise in prices, but also simultaneously one of the worst with a 13% drop! No wonder people are confused. The bottom line is that you have to look at individual areas down to a zip code level if you really want to know what is going on in the housing market. There are probably many neighborhoods in MA that are rising at double digit rates while others are falling. This doesn’t necessarily make one better than the other for the long term but is more important for real estate investors hoping to resell homes quickly.

If you are buying a home now you will probably get a much better deal in a falling neighborhood that is bordering a good one in the hope that it is soon boosted by the neighbors. Though if you are looking for a new residence it really doesn’t matter what the market is doing right now. It certainly won’t fall much further if it does and you only lose or gain when you sell. So if you plan to hold onto your home for the next 30 years or more it doesn’t matter what home prices do now. One thing is for sure and that is that by buying now you are sure to find plenty of great deals.

If you are still on the fence about buying a new property for yourself then perhaps it is best to consider what the down side is of not buying a home now. Should either home prices or interest rates rise from their current historic lows you could easily end up paying hundreds of thousands of dollars more for the same property in a couple months from now. For example if you were to take out a $300,000 home loan now at 4.25% your payment would be just $1,788 per month. However, if prices rise slightly and you have to finance an additional $10,000 and rates jump 2 points you will end up paying $2,221 per month and $140,000 more in interest for the same property. The odds are even worst case scenario that this home won’t fall in price anywhere near enough to compensate for having to pay that much more for it. The truth is that this is the opportunity of a lifetime to buy a home incredibly inexpensively. Waiting will just leave you regretting this mistake for the rest of your life. So why wait?

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