Sometimes it seems like there is never ending bad news for the housing market. The latest figures show that home costs continued to fall, as well as the volume of home sales. One major factor remains the amount of foreclosures and the large inventory of distressed properties that this will create when they are put on the market. Because of that, the suggestion that now being a good time to buy a home is not a very popular opinion. However, with the bad news come some rather good reasons that this might indeed be a good time to buy. For instance, the price of homes have decreased so much in many areas that it now makes buying a home a better idea financially, than renting.
Given what is going on, waiting might sound like a good idea, but while there might be a possibility that prices could be lower in the future, you should ask is how much lower and are there other important factors that are going to be as favorable a few months from now.
Here are some good arguments why anyone who is pondering the purchase of a home in Sarasota might want to act now rather than wait. For the first time buyer, they definitely have the benefit over current owners who have to sell their property prior to making a purchase. If you are behind on your mortgage, trading up is probably not possible, however, there are numerous current property owners with enough equity. For the first time buyer and owners with enough equity, these are just some of the reasons why this just might be the right time to buy.
Being a tenant is not such a good deal. Because of the foreclosure increase and less renters deciding to buy, the demand for rental homes has gone up in the past few years. Along with that, there has been less new construction since the economic crisis hit. That in turn has been driving up the price of rentals, which are expected to increase an average of 5% within the next year. Actually when the housing market is more stable, buying a home is a better value when you compare it to renting. This will more than likely increase home ownership in the near future, as expected, the rental rates increase in many locations and the home prices don’t.
Chances are the decline in prices is probably done. However, the important thing is what is coming now, not what has just passed. To clarify, there is no indication that prices are going to soar in the near future. The thing to take into consideration is that we are potentially at a turning point from Florida’s steeply dropping home prices to a long period of stabilization.
Being that mortgage rates are at an all-time low, it would be dangerous to assume that they will go lower or even stay the same. The prediction for 2012 is 5.7%, over a full percent higher than they are today. For example, if you decide to wait another year or two to wait for home prices to go lower. In that time frame, if the 30 year fixed rate increases to 5.7%, then home prices would need to go down nearly 12% to get the same mortgage costs each month, as you would now. That is over two times the price decrease that is expected by most speculators.
Also, getting approved for a mortgage loan is more than likely going to get harder. In the coming years, Washington is planning to shift more of the mortgage market into the private sector. It is too early to know how soon and what exactly is going to happen but the bottom line is it means higher interest costs.
Currently there is less competition in the home buying market. There might be a lot of lookers at open houses, but a slow sales pace makes it obvious that there are not many serious buyers making offers. The result of that is that you are not likely to find yourself in a bidding war and it is far easier to negotiate with home owners eager to sell. Common sense dictates that once there are clear signs of recovery, demand will increase and you could find yourself in a bigger bunch of buyers. In this case it doesn’t hurt to be a little ahead of the curve. So let the experts at Sarasota Realty help you negotiate through your home buying experience.