Real estate is a cyclical business. Whether it’s shifting from a buyers to a sellers market; a sellers to a buyers market or even from the Summer months to the Winter ones – the national and local real estate landscape is ever-changing. Even just this year we watched the real estate landscape fall and then rise rapidly here in Arizona.
Since then, the media has focused on the doom and gloom of a few housing statistics that only represent a portion of the picture. As an expert real estate agent in your local market, I’m happy to tell you that, for the right individual, owning a home is still one of the best investments you can make in your lifetime.
And now could not be a better time to buy. Lawrence Yun, Chief Economist of The National Association of REALTORS could not agree more. Not too long ago, he said “Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. Affordability could reach a generational high this year because of rock-bottom mortgage interest rates, helped partly by the Fed’s very accommodating monetary policy.” If you’re waiting to buy I home, I urge you to take a minute to consider the following benefits of buying now – there may not ever be a better opportunity than the one we presently face to purchase a home:
Housing affordability is at a generational high and has been steadily stabilizing since the boom years of 2006. Affordability, as measured by the median mortgage payment as a percentage of median household income, continues on a downward trend – meaning home ownership is within reach for more Americans.
2. All-time low mortgage rates
Rates are reaching generational lows due to monetary policy and won’t stay there for long. If you take into consideration the decrease in home prices, you have good credit, and you can put money down on the home, buying now, instead of later, is a good option.
3. There are lots of deals
Recently, the National Association of REALTORS put total inventory at 4 million homes. Of those homes, nearly 40 percent are estimated to be foreclosures. These aren’t your run-down foreclosed upon homes, either. Unfortunately, many homeowners fell underwater on their mortgage due to the decline in the economy. As a buyer, you’re able to help them get out from under a home they can’t afford and into a home for a great price.
4. In some cases, Sellers are ready to negotiate
When supply exceeds demand – obviously the buyer has the upper hand. However, right now in the Phoenix metropolitan area, that is not the case. So buyers have to be “hunters” and look for other signs of seller’s willing to negotiate such as a seller needing to move quickly due to a job relocation, or because they can no longer afford their home, they’ll most likely compete for your business on a monetary level. Also, sometimes depending on the outcome of the home inspection – a seller might be willing to take a drop in price in lieu of having to making the repairs a buyer might ask for.
5. Ahh, the American Dream
As I’m sure you’ve heard, owning a home is one of the best investments you can make. It’s absolutely true. Even during the decline in the economy, a recent Fannie Mae study revealed that more than half of Americans still consider housing to be a safe investment! If you plan to stay in your home for several years – enough time for it to appreciate in value or more than five years – then there’s really never a BAD time to buy a home.
Warren Buffet, the great investor once said: “Be greedy when others are fearful and fearful when others are greedy.” Buying a home IS an emotional endeavor, and always takes careful planning and preparation. If you’re confident in your ability to purchase a home – don’t wait – demand always catches up with supply – after all – real estate is a cyclical business.