Should You Buy Now or Wait? The Million Dollar Question.

Changes on the horizon via the Stimulus Package and raising conforming loan limits may help to bail out the subprime lending bust and could have a positive impact for the real estate market as well as the overall eonomy. Those who are facing foreclosure may be able to keep their home by refinancing. If these homeowners can avoid losing their home to foreclosure, selling below market, or asking for a short sale, this may help stabilize the declining housing market.

Hopefully it will slow down the chain reaction that occurs when homes with little or no equity go to auction and are not bought by investors and then end up going back to the bank as REO’s. As the bank’s inventory of homes has increased, they have begun selling below market to get rid of these homes on their books. This has definitely had a negative impact on the market value of all other homes. By allowing homeowners to refinance and avoid foreclosure, this will keep the bank from having to accumulate properties, which is not their business. Their business is lending money and that is what they want to do!

Although the subprime lending crisis has been a major factor in the turbulent housing market, it is not the only reason for the decline. Uncertainty plays a major role in the demise of the market. With all of the conflicting information out there, Buyers aren’t sure if it’s the right time to buy and sellers have been trying to get out while the getting is good. As inventory rises and buyer demand dwindles, prices decline. Basic supply and demand. However, in recent months, there are many sellers who have decided not to sell and have taken there homes off the market. Concurrently, there are many buyers out there who are seeing this as a good opportunity to buy. Thus, inventory is starting to decline in some areas. Maybe the end of the decline is on the horizon?

Let’s step back and not be sheep following the herd. What’s right for you may not be right for your neighbor, your coworker or the general population. Contrary to popular belief, your home is not a bank account. Your equity is not a form of savings. This belief system is what gets people into trouble.

If you are a Buyer, look at your personal situation and determine if owning a home is right for you. Would you benefit by the tax savings? Would you and your family be happier with a place to call your own? How long do you plan to own your home? Are you feeling crammed like sardines in your current home and would be happier in something more spacious? Would you like to be in a better school district for your children? Can you afford the payments of a fixed rate mortgage?

You can drive yourself crazy trying to "time the market". Everyone is waiting for the "bottom". There isn't going to be a big announcement on the news saying "today is the bottom - buy now", so how will you know? Well, every market and every neighborhood is different. The bottom may be different depending on the last sale of a comparable home. The more important question to ask yourself if you find a house you love is, can I afford the payments on a 30 year fixed rate loan? If you can and it's the home you love and it improves the quality of your life to buy it and you plan on living there a while, then go for it.

Owning a home is a personal decision and in general is considered a long term investment. Real estate is cyclical. The market goes up, the market goes down. But historically if you buy and hold real estate long term you will benefit from appreciation. Long story short, if you would benefit personally today by owning a home then do it. If you plan to own your home longer than 3 years with a fixed rate mortgage, what the market does next week, next month or next year won’t really affect you. Your appreciation/equity is only realized when you sell.

Also, every market is different. What happens in the Midwest or Texas or Las Vegas or Riverside or Oxnard is not exactly what is happening in your County, City or neighborhood. When you hear or read reports on the housing market always take them in context. More importantly pay closer attention to what’s happening in your community. Consult with a professional Realtor to know what is happening in your neighborhood or the neighborhood where you want to live.

We are currently in a Buyer’s market. There are a lot of great opportunities out there if now is the right time for YOU to buy a home. Even The Donald agrees. In an MSNBC interview in 10/07 Donald Trump himself said now and in the next 12 months in the time to capatilize on the Buyer's Market.

If you are renting, consider this: With a historically low fixed rate 30 year mortgage and lower tax base than previous years you can guarantee your payment will never increase. Your rent will very likely increase every year and you get nothing!

Making the decision to buy is just Step 1. Finding a competitively priced home, negotiating the best price, terms and conditions, obtaining the best financing and successfully closing the escrow is where you need the assistance of a real estate professional.

My specialty is negotiations.

Why wait until everyone else is ready to buy?

Buy when everyone is ready to sell.

This is when you can get the best deal!