Buying a Home in a BUYER’S Market

I have had numerous people ask me recently whether or not it is the right time to buy a home in Raleigh, North Carolina. The concerns come from lending issues to declining housing values and whether or not the market has reached the “bottom”. First of all, the answer is a RESOUNDING, YEEEEEESSSSS!!!!

There has never been a better time to buy a home in our market then today. Many real estate professionals have predicted that the Wake county housing market will see a minor depreciation in values throughout 2009, especially with re-sale homes to primarily keep up with the price reductions that we have been seeing in new construction for the past year and a half.

If this is true that the market will see depreciation this year, why is it still a great time to purchase a home in Raleigh? Simple, interest rates are low and there is no guarantee that they will remain this low. Tax credit for new home owners that will end on December 1, 2009. Even if you are not a homebuyer who would benefit from the tax credit, the financial are in place to purchase today. If we see depreciation this year, it will be minimal like 2-5%. If you purchased a home for $200,000 today. If values fell by 5% this year, then you would possibly loose $10,000 in value by the end of the year. However, since this market usually sees around 5-7% appreciation annually, then you can easily make up this difference in your first year in the home. Furthermore, the rates may be higher next year as better economies tend to have higher interest rates, so you may actually have a higher mortgage payment if you waited until next year for the proverbial “bottom” to hit then you would pay today.

Let’s face it, a single year of 5% depreciation can easily be turned around within the first 3-5 years you are in the home. Traditionally, homes will appreciate over time so whether or not you get the absolute bottom price today is diminished over time. The longer  you are in a home, the less it becomes important.

When is it not a good time to buy a home? It would not be a good time to purchase a home today if your finances are not in the proper condition to allow you to purchase today or your credit needs some work before you can get a great rate. If you are planning on purchasing before the end of the year to take advantage of the Tax Credit, then you may want to begin to speak with a lender today to see if there is any credit issues that need to be repaired. If you wait for the last minute to speak with a lender, then you may not be able to purchase a home for another six months while you go through the process to correct your credit issues or raise the required down payment. However, if you begin the process today, you will know exactly what you need if you want to purchase a home by the end of the year.

For more information or contact information for a quality mortgage lender, please let me know and I will be happy to give you the information you need.