I know I sound like a broken record BUT….based on prices, mortgage rates and soaring rents, there may have never been a better time to buy a home than now. So, whether it is your first home, trade up home, down-sizing home, vacation home or investment property…here are 5 reasons to buy that home NOW!
1. Supply Is Shrinking
With inventory declining in many areas, finding the home of your dreams may become more difficult going forward. There are buyers in more and more markets surprised that there is no longer a large assortment of houses to choose from and that there are multiple buyers vying for the same home. The best homes in the best locations sell first. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy.
2. Price Increases Are on the Horizon
Prices will bounce along the bottom this winter although Case-Shiller just reported a 1.6% increase in real estate prices in the 20 markets it surveys. This is the largest price increase since 2010 and above forecast. However, projections call for appreciation after that. Several studies and surveys call for price increases over the next few years starting in 2013 some say by as much as 10% by 2016.
3. Rents Are Skyrocketing
Rents historically increase by 3.2% on an annual basis. A study issued earlier this year projects rent increases of 4% for the next two years. Trulia recently reported that rents this year have actually shot up by 5.4%. Increasing rents are making home ownership much more attractive financially.
4. Interest Rates Are at Historic Lows
Federal Reserve Chairman Ben Bernanke has kept interest rates low in an effort to stimulate a lethargic economy. He understands that low rates will help housing and housing is a key to bringing back the economy. As the economy approves, the need to keep rates low will no longer exist. The 30-year-mortgage rate before the financial crisis was 6.57% (August 2007). Although Mr. Bernanke has said rates will remain low through 2013 or so, they cannot remain this low forever and have no other way to go but up.
5. Buy Low, Sell High
When investing, we want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this principle. Today, real estate is selling ‘low’ and it’s time to buy. Many I talk to say that in 5-10 years people will be saying they should have bought real estate in 2012. Hindsight is always 20/20. If your family situation calls for a move call me today so you will be one of those that looks back and says, “I am so glad I bought real estate in 2012!”