THE BEST TIME TO BUY IS NOW!
By Diane LaPlace, Keller Williams Real Estate, Northshore LIVING WELL Magazine
Location, location, location. In the latter half of 2011 that adage should come back into vogue. But first, more declines.
C’mon, you’re thinking, you’ve been hearing for months that prices have been more or less stable nationwide. True, but the still-soft job market, the foreclosure crisis, and the absence of incentives such as the homebuyers tax credit will push down the median home price another 5% or so next year, according to Moody’s and Fiserv, before it stabilizes by late 2011 or early 2012.
Individual markets, though, will start diverging from the downtrend by summer. About one-quarter of the nation’s 384 metro areas should see higher prices by year-end, and half will see drops of less than 3%.
Certainly, conditions will favor anyone in the market to buy a new home––or homeowners looking to refinance. Today’s record low mortgage rates, averaging 4.2% for a 30-year fixed term, are expected to remain low at least through the first half of the year.
Even if the economy picks up steam in the latter half of 2011, rates are unlikely to climb higher than 5%, says Amy Crews Cutts, deputy chief economist at Freddie Mac.
On top of that, assuming that banks can solve their issues with poorly documented foreclosures, home seizures will revert back to record highs, creating competition for sellers and keeping a lid on home values.
The combination of low prices, cheap mortgages, and a slowly improving job market should gradually entice buyers back to the market, setting the stage for prices to stabilize.
Seize the moment and go purchase that new home. The timing may never be better.
Diane LaPlace is “Your Senior Real Estate Consultant” with Keller Williams Realty and may be reached at 985-727-7103.
