Friday, March 21, 2008

Don't Read This Blog If You are Buying a Home Right Now!!


Because you are one of the many people who are taking advantage of one of the best real estate markets in recent times and you don't need any of the advice I have.


That's right. Interest rates are at historic lows, home prices have dropped, and the number of homes to chose from is at a historic high. Econ 101, when is a good time to buy? When everyone is selling.


This is not a market for everyone. However if you are a first time buyer, move up buyer or an investor, take a look at the marketplace objectively.

First time homebuyers have "nothing to lose". Rents are increasing, while home values have come down considerably. Many loan programs have become restrictive, however the once in a lifetime interest rates are an awesome incentive.

Move UP buyers are those who are selling in a lower price range and buying into a higher price range. First you must understand that your current home value has probably dropped about 10% in the last 12 months. However, the home you want to purchase has probably gone through the same depreciation. For example, your $400k home dropped $40k in value. Your dream home at $900k dropped $90k. So the move up buyer just added $50k in equity.

Investors...Remember, Its a Wonderful Life. Mr. Potter bought while everyone was panicking. Sure we don't strive to be Potter-esque, but he was a smart enough to understand when there were great market opportunities.