You Can Have It All – In Today’s Housing Market

Relax for a moment and take a deep breath.  I want to take you to a place where there are no distractions, only peace and quiet.  I want you to forget about the economy and the media’s coverage of the housing market and all your preconceptions for a moment.  Now continue on and read the many reasons (in no particular order) why now is undoubtedly the best time to invest in a home. 

 1.    Low Interest Rates - Rates remain at near record lows.  A conventional mortgage on a $200,000 home at a rate of 6.25% (last year, and likely next year) vs. 4.75% (today) would cost you over $186 per month more or $2,232 per year more.   This adds up to almost $66,960 of savings over the life of the loan.

 2.    Affordable Home Values - Home values are sort of irrelevant? Whether values are historically high or historically low, everyone is on a level playing field.  For most home investors, the possibility of receiving a lower than expected price for their existing residence is more than offset by the lower price they are receiving on their new home from a Builder.  Subcontractors and suppliers are very eager for business and are cutting costs for new construction allowing Builders to price homes aggressively low.  Plus, according to the Minneapolis Association of Realtors, the Housing Affordability Index (HAI) continues its yearlong improvement and another new record with a March 2009 HAI of 206-31.2 percent ahead of its March 2008 mark of 157. This will not last!

 3.    Higher Appreciation - Which investment is more likely to appreciate – your current older home that may need work or a home freshly designed and built to be relevant for today’s and tomorrow’s buyer?  After all, while you wait for the market to recover, wouldn’t you rather be waiting in a new low maintenance home, customized to your taste and style rather than wondering if your lawnmower is going to start this spring?

 4.    Buy Low, Sell High - It’s the first rule of investing.  Home purchases are not meant to be short-term investments and smart buyers know that waiting for a stronger market means paying higher prices.  You’ve heard the news that new housing starts have been falling for the past two years, meaning the supply is rapidly decreasing.  This also means that when the demand returns to normal levels and new homes are in short supply, prices will undoubtedly skyrocket.   It’s Economics 101, ask Warren Buffett!  Don’t lose out your chance to invest near the bottom.

 5.    Energy Efficiency - New homes have advanced technology and environmentally friendly features that can help you save money.  Take pride in living in a more environmentally friendly home and figure out what you would do with extra money in your pocket each month.

6.    Experience the New Home Experience – Builders are rolling out the red carpet for their customers these days.  Don’t miss out to have a great buying experience with a customer focused builder before they get too busy to go that extra mile.

7.    Quality Counts - Homes built in a slower housing market are constructed with more care and by more highly talented craftsman.  A lot may have been overlooked in the days of “How fast can we build?” – not on purpose of course, but some builders may not have had the time to be picky.  Now builders are able to be more hands on and make sure attention is paid to the details.  Plus with a possible lighter workload, only the best tradesmen have retained by subcontractors, which in effect “weeds out” the amateurs.

8.    Made in the USA - With the housing industry comprising over 1/5 of America’s GDP, it’s no wonder the economy is struggling.  Most Americans feel a patriotic draw toward buying American made products, but does it really make a difference?  Think about this – virtually ALL of the dollars spent building and buying a new home stay in your local community.  Simply put, those who wait on the sidelines are continuing to compound the problem, but those who can afford to purchase a car or home or something else manufactured in the USA during a time of recession and actually do it are patriots and should be applauded.

9.    Unbeatable Investment – Even in down markets, over the long term home prices still appreciate more than the stock market.  Although housing prices have decreased over the past few years in the Twin Cities, take a look at what’s happened to the much more volatile stock market only in the past few months.

10.   New $8,000 Federal Tax Credit – Until December 1, 2009, qualified first-time home buyers (those that haven’t owned a home in the previous 3 years) can receive an $8,000 tax credit that doesn’t have to be paid back.  Learn more at: www.FederalHousingTaxCredit.com

11.   The Market has Improved - According to the Minneapolis Association of Realtors the Twin Cities market is showing significant signs of improvement.  Pending sales are up 33 out of 34 weeks this year over the previous year.  Also, new listings and total inventory of homes are down over the same period.  This means more home sales and less competition to sell your home, which is great news when selling or buying a home.  These indicators signify the Twin Cities market is stabilizing which is necessary for the market to continue to improve.

To add to the discussion for further explanation please make a post on our BLOG.

Thank you to Tom Joyner from the Villas at Timber Run and Jeff Scherber from Prime Mortgage who contributed to this BLOG post.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.