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Buyers Continue To Struggle With Waiting Or Acting Now
(The slowing housing market is causing all sorts of speculation on behalf of buyers, sellers, economists and industry insiders; pretty much everyone has an opinion on where the market is headed and what everyone should do. )
It is during these times that buyers find themselves with the biggest question: To buy or not to buy?
Many people are saying that now is the best time to buy since prices are low and there are a lot of homes to choose from. Others are saying that potential buyers should hold off and wait until the market corrects itself.
A November 6, 2006 article by Elizabeth Weintraub of about.com, "Buying in a down market," discusses how many buyers are wondering if buying when the market is slow is really a good idea or a bad idea.
"It's scary for home buyers and sellers when markets change. Just when you think you know what's going on in real estate -- POOF -- it changes! It might help, though, to understand that markets move in cycles."
"Sometimes they go up, sometimes down, sometimes they are moving around in circles, but it's never so squirrelly that economists can't point to past performance as some kind of indicator of future directions. Yet, it's enough to stop some would-be buyers stone cold and cause them to wonder about the consequences of buying in a down market. Is it safe? Is it smart? The answers will astonish you."
If you are one of the many people who are grappling with the question of whether or not to buy, the answer really lies with your self.
A potential buyer should not let the market dictate whether or not it is a good time to buy. Instead you should analyze if you are financially and emotionally ready to become a homeowner.
But of course, now may be a good time for many people to buy because of the fact that we are in a buyer's market in most areas of the country.
"If you are a seller who wants to move up to a more expensive home in a down market, now could be the best time. The longer you wait to sell, the lower the price of your home could fall. If you can arrange for alternate housing, a smart strategy is sell now, wait a few months, then buy your new home."
If you are one of the many people who has to sell their house before they get into a new one, there are even more things to consider right now. Buyers who will be new to homeownership actually have it easy because they only have to wait for their lease to expire, not to sell a home and buy one at the same time!
People who have a home to sell need to do the math and decide whether it makes sense financially to sell right now.
"For example, say your present house is worth $300,000, but because of high inventory and few buyers, you must reduce your price by 10%. So, instead of receiving $300,000, you would get $270,000 and 'lose' $30,000."
"Now, consider this. Say you bought this home 10 years ago and paid $100,000. You're still ahead $170,000, less costs of sale, aren't you? (This ignores monthly payments, but you would make those if you were renting, too.)"
So if you are still deciding whether or not now is the right time to buy, just do the math and analyze your own personal situation and the answers should become quite clear.