01 Jun Real Estate: Should You Buy or Rent?
Have you been wondering what’s going on with the real estate market? After all, everything that’s happened over the last several years has been pretty incredible. The media has been blathering the slump like it’s the Titanic (sunk, not just sinking). You’ve probably even heard an expert or two tell you not to buy but to consider renting instead! (Hmm. Good luck with that.)
Okay, so now it’s Spring. This is traditionally the time when real estate begins its annual boom. People are usually thinking about buying. However, with the fluctuation of the economy, the ranting in Washington over the budget, and a teetering housing market, many would-be house hunters are wondering what to do.
Instead of being eager to get started, a lot of people are asking questions like:
- Is the housing market at or near the bottom?
- When will it get better?
- Are the signs that the market is stabilizing real?
- How’s the housing market now?
- Should I buy or should I rent?
We had a small boom in sales when the government started cutting checks for $8,000, payable to first time home buyers once their purchase was completed. That was good for a lot of people. But that ended and sales quickly fell. That’s why the debate continues whether housing prices are near the bottom or not. However, buying a house today, in the right market, of course, will still prove to be a good investment over the long term.
Helfant-Browning, CEO, Principal Broker and Managing Partner of Coldwell Banker says, “If you’re going to pay to live in something every month, why not own it? By getting a 30-year fixed-rate mortgage, 10 years from now when the rents in the community are usually going to be substantially higher, the only thing that will change for you is your home owner’s insurance and your real estate tax.”
Who should you listen to?
While some people may be telling you that you’d be better off renting rather than buying, I can’t say that’s wise counsel. Here’s the inside scoop — think about the area where you’d consider buying, not the national average.
While some places are hard hit and showing little to no signs of recovery. Other areas ARE in recovery and experiencing appreciation. Home prices and the prospect of appreciation vary greatly from region to region, and even from city to city. For example, a report I read recently at Moody’s Economy.com stated that home values in Minneapolis are expected to increase 21% by 2018. Prices in Austin, Texas, are projected to rise only 8%.
This proves my point to think about the area first and foremost. The housing market might come across as gloomy via the media, but many experts (including me) will tell you the financial advantages still remain.
I’ve been saying this for a couple of years now — America’s homes are tremendous investment opportunities because they’re at garage sale prices! This is a great time to buy a primary residence and invest in real estate. You won’t get better prices in the near future. The tide is turning.
What should you do?
Get qualified. Interest rates on 30-year fixed-rate mortgages are at historic lows. The national average is about 4.69 percent. That’s a good thing! Plus, there are signs that the credit markets are loosening up. Here’s what you need to qualify, according to Keith Gumbinger, vice president of mortgage information website HSH.com. “You’ll need good credit to get the best pricing… We’re talking about a FICO 740 or above for the best possible pricing.”
Work quickly. If you don’t have cash and you don’t have great credit, make those your goal.
(Sources: Money.usnews.com, TheFiscalTimes.com, Bloomberg.com, NY Times)
What do you think?
Let me know your thoughts. Are you thinking about buying or investing in real estate? How’s the market doing where you live? Are you beginning to have more confidence in the market? Will the next wave of foreclosures that’s coming scare you or do you see it as an opportunity? Talk to me.