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This is only the worst time to buy real estate if you are broke May 26, 2009

Posted by mstand in Uncategorized.

Every time some sliver of positive news about housing is broadcast, I think back to an article I read last February by a well known “financial adviser” stating the 5 reasons this is the worst time to buy real-estate. At the time my first reaction was, we don’t need an article like this… and then I thought could she be right??? For some, but not all. Three months later I still believe that. Actually this may be a once in decade or maybe a century (well maybe that is too bold a statement) to purchase real estate at these prices.  The caveat for the buyers is each must do his/her due diligence and home work and have the wherewithal to make it through the financing portion.

If you are a first time home buyer with nothing to sell or an investor looking for rentals what a bonanza! Both have the opportunity to purchase under 2005 market prices or lower and reap good equity gains. Pick a neighborhood and house in your price range. My clients are continually surprised by what is on the market! Especially the number of houses under $250K—albeit most are bank owned or foreclosures. Mortgage rates are under 5% for conventional loans and rumblings have begun that maybe Jumbo rates will be more attractive. Outside of FHA, Financing can be problematic and without a credit score of 740 or above more expensive. But what the heck! Rates are the lowest in 30 years and many can still qualify within his/her budget. Just plan to keep the property for little a longer than the months to payback the fees and points (if you pay them) and one will come out a head. Add the First Time Home Buyer Credit (incentive, sweetened by the Washington State Realtor Association program to allow the $8K credit to be at time of closing (go to http://www.realtor.org for details) and the door is open to those have the financial profile but were held at bay by higher home prices.

From the “advisors” perspective, buying a house in 2009 was not a good idea because the prices would continue to be plummeting to earth. Well in King County at least, falling home prices seem to be reaching the ground. Maybe not next year, but I would go out on a limb and say 5 years from now pricing will be a lot different. And those who purchased during this recession/depression/credit adjustment era will have accumulated satisfactory equity in their houses. I suspect in typical fashion the government will be slow (not this year or maybe next) to put their arm around the huge plies of money and pull it back from the table. The justification will be lenders now have more “prudent” lending practices and the housing sector is recovering Inventory will be reduced and prices will very slowly nudge slightly up.

With that said here are my 5 reasons to Buy Now:

1- Price
2- Inventory of properties
3- Mortgage Rates
4- First Time Home Buyer Credits
5- Housing market show signs of stabilizing

Yes now is the worst time to buy real estate if you are broke!

PS- Look for my next Blog – Now is the Best Time to Buy Furniture For Your Home!!



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