The Top 10 Reasons You Should Buy a Home - Now
Posted by Lee Cameron on Tuesday, September 28th, 2010 at 2:27pm.
Time to shine some light in the darkness.
It's a rough market. That's not news. That hasn't been news for years now. Everybody in America knows that it's a rough market and the dark cloud that has been hanging over us has kept buyers away in droves. But for the family that can afford it, this is a great time to buy a home.
I'm serious. There is a ray of sunshine shining down through that dark cloud and it's lighting up some wonderful homes just waiting for buyers. Somebody just needs to convince those buyers to venture into this rough market to find them.
Here are 10 reasons why this is a great time to buy a home.
1. High Inventory
The NAR estimates that there are about 4 million homes on the market right now. Currently, there are 13,236 homes in Orange and Seminole county alone! At the current rate of sales, it would take about a year to sell off every home in America. That's a scary thought for anyone who is trying to sell their home right now, but for buyers? For buyers it means that you have an enormous selection. No more settling, it is now entirely possible to go out and find EXACTLY the home that you want with so much out there to choose from.
2. Low Prices
Remember high school economics? What was the most basic principle that determines pricing? That's right, supply and demand. As I've already mentioned, the supply is very high. And right now, the demand is very low. There just aren't a lot of buyers out there. That means, naturally, drastically reduced prices. On average, prices are down 30% from their peak. In some places, prices are down a whopping 50%! Reasoning says that this won't last forever, prices will begin to rise again before too long. Take advantage of the chance you have now.
3. Low Competition
Years ago you could put an offer on a house and expect to be competing with half a dozen other offers. Those seem like ancient, mythical times now. No longer do you have to worry so much about being out-maneuvered by another buyer and have that home that you were dreaming about snatched away in the 11th hour. Now buyers are few and far between and there are enough homes on the market for everyone.
4. More Bang For Your Buck
You know who is facing stiff competition right now, though? Sellers. And one of the best ways for sellers to compete is to make sure their home is in the best condition they can offer. As a buyer you have more freedom now to request those repairs or those updates on that home that you're looking at. Of course, this won't always be the case. A large percentage of homes on the market right now are short sales and bank foreclosures. These homes are often sold as-is and though you'll find some great deals in that market, you likely won't find mint condition houses.
5. Record Low Mortgages
Mortgages are going for record low rates right now. A 30-year loan that would have had a 6.3% rate two years ago is now around 4.3%. Same home, drastically reduced monthly mortgage payments. How can you argue with that?
6. Tax Deductions
Sure, you missed last year's first-time home-buyer tax credit, but there are still the deductions. Don't you love deductions? I know I love deductions. And buying a home can give you a whole slew of them. Mortgage interest, real estate taxes, you can deduct them. And if you consult your tax attorney you'll likely be able to find many more! There's a lot of math involved for you (or for your tax attorney perhaps) but you may find that the tax benefits alone will make owning a home even more affordable than renting.
7. It's a Good Investment
Many, many homeowners right now are underwater on their mortgage, living in homes that are worth less than they owe. This is a frightening prospect for any home owner and has understandably made many buyers wary. But those homeowners usually got in the position that they are in by buying during the height of the housing boom or through a recent financial hardship. If you buy an affordable home now then the value of your home has nowhere to go but up - assuming you plan to stay in your home for a few years, of course. Nobody expects the market to improve right away, but it will improve and you'll be gaining equity as it does.
8. It's a Good Way to Save
Ok, that may not make sense on the surface. How is buying a home a good way to save money? It depends on how you look at it. Remember, your worth doesn't just come from the numbers in your bank account, but also the real property that you own. As I just mentioned, the housing market will go up and if you ride the wave in your new home, you'll be watching your equity go up as well. That means that buying a home is an investment in your own future. Look at it this way - if you find a home to rent for $1,000 a month and a comparable home that would cost you $1,500 to buy, which would you choose? Sure, if you chose to rent you would save $500 a month, but would you be disciplined enough to put all $500 into a savings account to save for your future? If you instead put that money into a new home then every penny would go to improve your own equity.
9. It Belongs To You
The pride of ownership is unquantifiable. It may not seem like much but when you're sleeping in a home you own, with the freedom to make it exactly what you want - the freedom to repaint, expand, remodel, rearrange and just enjoy - there's an immensely satisfying feeling that you just can't measure. It's that feeling that allows people to paint their homes bright colors to stand out from the crowd, to invite family over for Christmas time to ogle at all the decorations, and even to just sit on the front porch and yell at kids to get off the lawn. It's YOUR home. Is it worth the cost? Well, that's up to you, but it should be taken into account.
10. The Clock Is Ticking
And the most important reason that you should consider buying now is this: you're looking at a limited time offer. Nobody knows if or when the market will truly hit bottom, but almost everyone agrees that if we're not already there, we're settling in on it. That means that someday soon the market will start to improve, prices will start to go up, mortgage rates will start to go up, the selection of homes will start to narrow, buyers will start having to compete and everything will go back to quote-unquote normal. You likely won't see another buying opportunity like this in your lifetime. It would be a real shame to miss it.
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