Is now a good time to buy a home?
Wherever I go, the questions seem to be the same. Those who know that I am a Realtor, ask, first of all, “How is the real estate business?” Or, “How is the market in Monroe?” The questions that I seem to get most have to do with property value and if now is a good time to make the plunge into selling, buying, or both.
In the National Realtors Association advertisements, we are admonished that “all real estate markets are local”. The Monroe and the NELA Region real estate market has been described as “boring”. Compared to most of the other parts of the nation, that’s a good thing. While other market’s values were dropping faster than first year law students, our area showed little change in home values. The flipside is that homes have not increased in value the same rate as before the “bust”. 2011 year to date third quarter indicators tell us that there is positive growth over the same period 2010: Number of houses sold, up 4.0%; Total sales volume, up 9.8%; Average sales price, up 5.6% with an average days on the market being 131 days (Source: Northeast La. Association of REALTORS). Based on these numbers, the answer to the first two questions concerning the real estate business and the market is “Good and growing”.
The next question concerning now being a good time to buy or sell a home may take a little more effort to answer because the answer depends heavily on the goals, desires, and stability of the individual asking the question. Remember, if you are selling your existing home and buying another in the same geographical area, you are selling and buying in the same market conditions.
Renting vs. homeownership: Current and future value of the dollar affects both. The number of those dollars an individual keeps (saves) is dependent upon the decision to rent or buy. The principle portion of a house payment becomes equity and the interest is tax deductable (saved money). None of the rent payment is “saved”, thus no equity (spent money). Buying a home today makes more financial sense than renting.
Mortgage rates are at an all time low. Some of us remember when the mortgage rate was 13%. If you take out a $300,000 30-year fixed rate loan today at 3.875 percent your monthly tab will be $1,410. But instead, you decide to wait another year or more on the theory prices are heading lower and during your wait the 30-year fixed rate rises to 5.7 percent you would need home prices to fall nearly 12 percent to come in at the same monthly mortgage cost as what you can get now. Qualifying for a mortgage is likely to get harder, not easier.
It seems common sense that once there are clear signals of economic recovery, demand will pick up. Being a little early/ahead of the curve gives more elbow room for dealing.
Al Peterson, Realtor
Mobile: (318) 237-1178 Office: (318) 388-0941
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