Who should buy a home in 2008?
By Jeffrey Nunn
Coldwell Banker Residential BrokerageToday’s home market presents both challenges and opportunities. We are experiencing growing inventories, falling prices and historically low and falling interest rates. Even with mixed signals in the economy, there are groups of people who want and need to buy a home. The National Association of Realtors projects that 5.7 million people will buy existing homes this year, with sales and prices rising compared to 2007. Who should be looking carefully at today’s market?
1) Renters. Renting might seem like the safe move, especially in an uncertain market. But with rising rents, low interest rates and the tax advantages of owning your own home, the time to buy may be 2008 when there are so many options. A professional real estate sales associate can tell you how much house you could buy for the same money you are throwing away on rent every month.
2) People with good credit. All of the headlines about subprime borrowing and tightening lending standards have scared away many people from applying for a home loan. But banks and mortgage lenders have not gone out of business, and they are eager to lend. A majority of people can still qualify for a 30-year fixed-rate loan. If you have a job and a satisfactory credit score, banks want to lend to you.
3) Empty nesters. Many people in their 50s and 60s would like to sell their large homes now that their kids have moved away and find a smaller home, a condominium with less maintenance or a home closer to the ocean. But they are afraid they will not get a good price for their current home in today’s market. Let’s face it, timing the market isn’t possible. You are not going to get the same price for your current home if you had sold at the top, which was about 18 months ago, but you don’t have to wait for the bottom to get a good deal. In fact, it’s better to sell your home and buy a new one when housing is trending down because the balance of power is in favor of the buyer. And the direction of area home values won’t make much difference to homeowners who will both buy and sell in the same area.
4) Buyers who plan to stay put for a while. If you expect to stay in your next home for more than two or three years, 2008 may be the perfect time to buy. There are many options available and you do not have to worry about the short-term cycle in the economy or interest rates affecting your home’s value. You can take advantage of the long-term cycle, which has shown that over time housing is one of the best investments we make during our lifetimes.
5) Someone who is ready to buy their dream home. Did you look at your dream home a couple of years ago and realize you couldn’t afford it? Look again. Prices on homes in every price range have come down. Because this is a buyer’s market, you can take time to shop and find that once-in-a-lifetime home before the market turns around and prices move higher again.
This year will continue to be a buyer’s market but at some point prices will stabilize and the market will turn. Contact a professional Realtor who knows the state of the local market and can help you put together a bid. People who buy in 2008 will look back and be glad they did.