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Tuesday, May 4, 2010

Should You Buy a Home in Today's Market?

First, if you are thinking about delaying a purchase because you want to "time the market" to get the very best deal, that is almost impossible to do with precision. Even if you are in an area with declining market prices, the most knowledgeable experts cannot reliably anticipate the "bottom" of a real estate market.
Second, if you aren't an owner, you're a renter. Renting is just throwing money away. You don't get to reduce your income taxes by itemizing deductions like property taxes and mortgage interest. However, for many, renting can provide a better home in a better area than they could afford to buy and is cheaper than owning. And, the money saved during the renting period could be saved. The period of time spent renting and saving could also be used to repair and improve credit, so that when the time does come to buy a house, it will be possible to get a mortgage with more favorable terms, conditions and interest rates. As a renter, you are limited on what changes you can make to your living quarters. As an owner, you can paint your living room chartreuse if you want or put in an avocado green carpet. You can change light fixtures, garden and landscape. You can do whatever you want that makes your home a comfortable place for you and your family. It's your home, not a temporary place to sleep and eat until you do buy a home.
Third, interest rates are very low right now. If you wait, interest rates could be higher. That means your monthly payment could be higher, too. No one can predict rates that far in the future, of course, but rates are very low right now.
Plus, the easiest way to accumulate wealth is through home ownership. Three out of four people have more equity in their home than assets in retirement plans, stocks, mutual funds, and savings. Though no one can guarantee your property will appreciate, over time it generally does.
How do you minimize the possibility of lower appreciation for your home? Determine your price range. Then choose a neighborhood where your target price is in the lower tier of prices in that neighborhood. That way, your home has less vulnerability on the down side and the higher-priced homes will help pull you up during hot markets.
Finally, talk to me Scott Larson a real estate agent with Re/Max Towne Square Realty and ask for advice. Ask me what the market is like in your area.
Ph. 608 214-9844 or E-mail
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