June 14th, 2012 7:43 AM by Lehel S.
Why is it a good time to buy a home
Much has been written on this lately everywhere. But truly it is a great time to buy a home right now.
1. Home prices are at a pre bubble low. Most areas that have seen high appreciation have also seen a high drop in prices. Those prices are not moving higher any time soon. Here are some of the reasons:
a. High unemployment
b. European issues
c. Tight lending standards
d. Conservative appraisals
2. Interest rates are at historical low points. An interest rate of 3.5% is almost at no cost to those that qualify. These rates will likely stay low for the foreseeable future. Here are some of the reasons:
a. The Fed is committed to keeping rates low
3. Supply of homes is low. This changes with market and with what people are willing to do but right now it is low. In the greater Los Angeles area it is close to 2 months’ worth of supply. This means:
a. Multiple bids for properties
b. Less to choose from
4. Appraisals are a wild card right now. Appraisers are hesitant to write appraisals that are not at the current market values and are writing them at prices that are reasonable and realistic for the current market. A few things can help with appraisals:
a. Point out improvements to the appraiser
b. Request a review by the lender
c. Provide comparable sales
d. Request a second appraisal
5. Despite the current drawn out crisis in real estate, 75% of Americans still aspire to own a home. Sadly the insecurity in the job market is keeping many people on the sidelines and away from buying.