Is now a good time to buy?

Hello and welcome to James' blog site. I'll try to keep this on-topic--although I digress frequently--and just talk about Real Estate in a timely matter.

"Is now a good time buy? How close are we to the market bottom?"

This is a question I get frequently. I cannot predict the future--other wise I'd be at the horse tracks or a casino to make my living. However, I do know that things are aligned pretty good to call now a "GOOD TIME TO BUY."

National Association of Realtor's First Time Home Buyer Index for Los Angeles County in Q4-2008 was at 46% which is a recent-high as well as the index being similar to 2003 levels. This means 46% of families in Los Angeles County can own an entry-level home compared to 27% in Q4-2007 which is a 74% increase. Housing prices peaked in LA County in the summer of 2007 but compared to that, median home prices has come down -45% by January 2009. Interest rates are hovering around "historical lows" at below 5.0%. Also, if you haven't owned a home in the last three years, you may qualify for the Federal First Time Buyer's Credit and receive an $8,000 tax credit if you buy your home by December 1, 2009.

Also, with all of President Obama's Stimulus Packaging going into action, the general forecast is that the US will exit the recession in the second half of 2009 to early 2010. There is some expectation that house prices will bottom out and start increasing around the same time. Interest rates can't go much lower, so the expectation would be that it will start rising in the near future when the Federal Reserve Bank becomes concered with inflation.

Can you buy a house at the bottom of the market? Yes, if you are lucky. But you need to know that you can only know a bottom was made after the price has risen quite a bit. I think it's easier to negotiate a good price on a house when the median price is still falling rather than when the price is already rising.

Monthly payments associated with owning your own home may look much higher than the rent you are paying now, but when you take tax consequences and equity build-up, the two payment tend to look really competitive. Of course, if you own a home and pay it off after thirty years, you will no longer have to pay rent and may be sitting on a pile of cash called equity which appreciated over the 30 years. If you continue to rent, you'd still be paying rent after 30 years and won't have the equity or the appreciation possibilities.

All of the content of this blog is convered in my "First Time Home Buyer Seminar" so please register on-line to attend one of my presentation. This is a FREE seminar with NO OBLIGATION--but hopefully, you'll like me and select me as you Real Estate Agent.

James

http://JamesMakishima.com

http://twitter.com/JamesMakishima