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Real Estate & Finance News That Affects Your Home                                                         May  2008 - Page 2

 

TIME TO MOVE

Today's Market Opens Doors For Many Buyers

During the booming nationwide housing market of the early 2000s, lots of home buyers bought what they could get in their price range--not necessarily what they hoped for. Limited selection and competitive bidding forced many people to "settle" for properties that didn't really meet their particular needs or tastes.

Today's market offers a terrific opportunity to correct those somewhat-forced decisions. It's no secret that in many markets there are significantly more homes for sale now than were available three or so years ago. That means buyers now can pick and choose among available properties to find a home that more closely matches their needs. If you are looking for your next better home, consider your options. While some homeowners will need to sell their current home in order to purchase their next one, you may not need to sell before buying. A bridge loan could help you span the gap in the event your old home doesn't sell prior to settlement, or closing, on the new one.

Another option: Rent out your old home, making it an investment property. Depending on the market, rent payments may cover most or all of your ownership costs--you might even make money--while you find a great deal on a home more suitable to your tastes and lifestyle.

Remember, even if you can't sell your home for as much as you might have a year or two ago, neither can the other sellers in your area--it's still a "level playing field." The upside today is that you have more homes to choose from, and you can still take advantage of today's low mortgage interest rates. Of course, both those great advantages are also available to current renters and first-time buyers.

KEEPING PERSPECTIVE There's No Need To Panic You don't have to look hard for news stories about changes in the nation's housing market. The media regularly reports on foreclosure rates being higher, home prices dropping in some areas and sales taking longer than they used to. It's all true, in some sense, but compared to what? A phenomenal housing boom that lasted nearly five years.You don’t have to look hard for news stories about changes in the nation’s housing market. The media regularly reports on foreclosure rates being higher, home prices dropping in some areas and sales taking longer than they used to. It’s all true, in some sense, but compared to what? A phenomenal housing boom that lasted nearly five years. The truth is, booms don’t last forever, and the adjustment to a more-normal market just doesn’t look good by comparison. Consider the following: National Realty News says national statistics show that homeowners who purchased in the last two years put a median 10% down payment on their homes and now have a median 13% in equity. Those who purchased five years ago placed a median down payment of 11% and currently have a median 41% equity in their homes. Today’s interest rates look terrific from an historical standpoint. While interest rates on a 30-year fixed-rate mortgage have been hovering around 6%, according to Freddie Mac, the average interest rate 10 years ago (1998) on a 30-year fixed was 6.94%; 20 years ago, 10.34%; and 30 years ago, 9.64%. Housing markets vary considerably by location--national statistics mask what’s happening in your particular area. While some regions have been harder hit than others, not all markets are experiencing price declines. Even within markets, some areas and property types are still appreciating in value even though nearby neighborhoods may be seeing price drops. Simply put, all real estate is local.

 

 

 

 

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