Well, that ain't so! Most of the so called "experts" are not real estate experts. I have watched investment shows while four experts discuss which stocks they think are right to buy. All four have their favorites and each gives good reasons why the other three experts are really idiots. Then after 10 minutes of this, the moderator will ask them about real estate. All four will give the same response - it is a bad time to buy, prices will continue to drop, it is just bad-bad-bad! This is the only thing these "experts" have agreed on the whole time they have been on the program. However, when they were introduced, there was nothing said about them having any real estate experience - they all work for business magazines, websites, or stock brokerages. They all have an agenda - get your money out of real estate and into the stock they sell.
However, everyone keeps telling us it is a "buyer's market". Doesn't that mean it is a GOOD time to buy? Actually it does! Right now, because of the relentless bad press on real estate, prices have dropped. They have not dropped by double-digit amounts as the press whould lead to you think, but in most markets prices today are 3-5% below the level of a year ago. However, prices have actually gone up in some areas this year. Also, most home owners are not in a "have to" sell situation, so they will not make drastic price cuts, even with the "I'm going to steal a house" mentality many buyers now have.
If you are buying, expect to get a fair price, but not to steal a house. Sellers will just wait you out. Right now, you can buy a house at a reasonable price, but if you wait another year, you may be paying 8-10% or more to buy that same house. That's OK, the sellers are willing to wait.
How about interest rates on mortgages. The press has not been telling you that rates are really low. You can find 30 year fixed rate mortgages at around 6%, give or take a quarter. For 15 year terms, fixed rates are below 6%. Folks, those are LOW rates! Does anyone remember the early 80's - back then 15-18% was common and people went nuts when the rates dropped to the 11-13% range.
Regardless of what the press says, the economy is good right now. Interest rates are low, unemployment figures are low, the economic reports show the economy growing, and if not for rising gas prices we would say the economy is booming.
It is a good time to buy real estate, before the prices and interest rates begin to go back up. And you know they will.
Copyright 2007
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