Frequently Asked Housing Market Questions

It seems that home prices appear to be moving down. So why should I buy now? If I wait, won’t prices go even lower?

All the market fundamentals show that now is a good time to buy – prices are down, interest rates are affordable, there are lots of homes to choose from. Based on projections the Capital Region will be experiencing another building surge within a couple of years as more people are continuing to move into the area, employment rates are stronger than elsewhere in the state and our communities offer extraordinary quality of life. According to Forbes Magazine, January 2009 issue, the Capital Region is among the best areas in the country to live and own a home.

If you try to wait and time the market until it hits rock bottom (if it hasn’t already), you are likely to lose out... Deciding to buy now, you will not only be in the driver’s seat during the buying process, you will also immediately gain all the benefits of being a homeowner.

My neighbor sold his house at the peak of the market for $300,000. Today, I can only get $270,000 for my home. Why should I take a $30,000 loss on my home? Doesn’t it make sense to wait out the market until I get the same price on my home that my neighbor got before buying a new home?

It’s always better to trade up in a buyer’s market. While the value of your house may have fallen, the price of higher-end homes has also dropped. In this example, your home value has declined 10 percent to $270,000. But in today’s market, higher priced homes have also shown price declines.

But for argument’s sake, let’s say that a $500,000 home has also dropped 10 percent in value and now sells at $450,000. If you sold your home today for $270,000 and purchased the larger house for $450,000, the difference in price would be $180,000. But if you waited to recoup the 10 percent value on your home and sold it at $300,000, chances are that the same higher-value home would also move up in price to at least $500,000. That’s a $200,000 price difference between the two homes. So by selling today, you would actually be able to purchase $20,000 more home for the same money.

If I buy in today’s uncertain economic climate, my home may not appreciate in value. Isn’t it better to wait until the economic picture becomes clearer?

With tax credits for first time homebuyers and low interest loans available for a short period of time, buyers have a window of opportunity never before seen. Homes have appreciated in value over the long term and are likely to continue doing so in the future. Waiting delays your ability to take advantage of the Federal government’s home buying incentives.

Interest rates have continued to remain low and appear to be in a downward trend. I think they will continue to move even lower, so shouldn’t I wait until that happens before I decide to buy a home?

Interest rates currently are extremely favorable for buyers. In fact, they are hovering near 30-year lows. Even those who follow the market for a living can’t figure out when interest rates will bottom out…if they haven’t already. If they could, they would all be multi-millionaires. Because interest rates are near historic lows, it is much more likely that they will head higher in the future as opposed to moving even lower.

In short, the smartest and safest time to buy is now. We know that interest rates are low today. We know that home prices are affordable. We know that there are plenty of homes on the market to choose from. And we know that builders are willing to offer attractive incentives. Any or all of these favorable variables could disappear in a matter of months.

Finally, your home appreciates over time, making it one of the very best financial investments. Homeownership a stepping stone to a future of financial security, It is truly the cornerstone of the American way of life, and the fulfillment of the American dream.