Does every cloud really have a silver lining? I believe it to be so. Rather than lamenting it, take advantage of our current economic situation. With the combination of low interest rates and low housing prices,
Austin real estate company HomeCity believes now could be the best time to invest.
The CNN story,
“Real estate: It’s time to buy again,” provoked quite a stir on the web, from both supporters and opponents. One cyber-pursuer retorts: “Ha! What a joke.” Despite these cynical reactions, optimistic predictions about real estate are become more common among economists. This is partially due to the economic growth. A
survey of economists and policymakers recently indicated that the gross domestic product, the “single most comprehensive indicator of the economy’s health,” will likely grow 2-3% this year. The prediction of economic assures us that the housing market will get stronger in due time.
So, real estate will improve, but why should you buy now? Any real estate mogul will suggest trying to buy at the bottom of the market and, as studies indicate, we are pretty close to the bottom. One study by Deutsche Bank shows that homeowners now pay just 9.8% of their income in after-tax mortgage, tax, and insurance payments, down from 17.2% at the market’s peak in 2007. Additionally, with such low prices, home-buying has become incredibly affordable. Phil DeMuth, co-author of the hot-off-the-press
Little Book of Alternative Investments, encourages his readers to buy by explaining that “Housing prices are where they were in 2002 and you’ve got mortgage rates at 5% now on a 30-year mortgage.” If you can qualify for a good mortgage, DeMuth says, “I’d say this is an excellent time to take that kind of position.”
Even further, the dream houses that we couldn’t afford before are now attainable.
Robert Glaser, CEO of Smith & Associates Real Estate, explains that “with housing prices well below what they sold for a few years ago, and with mortgage rates below 5%, luxury homes that once seemed unobtainable are now within reach of more buyers.” But, as Glaser warns, “We expect the market has started to steady out as the inventory of attractively priced, well-located homes in the luxury range decreases, and as sellers attempt to begin raising property values again. But for the moment, there are still some great bargains out there.” The moment is fleeting and therefore as buyers, we gotta act fast. Happy shopping.
Bio: James Kim writes for Austin Real Estate service Homecity.com. HomeCity combines powerful online Austin MLS search technology and other online tools with personalized real estate services to provide clients with the knowledge they need to make the right buying and selling decisions.