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There hasn’t been much to cheer about regarding real estate over the last several years as home prices have plummeted, foreclosures have skyrocketed, and activity in the market as a whole has been significantly reduced since the housing bubble evaporated. It has been hard on families who have lost jobs and hard form families that rely on real estate as their main source of income. With all the negative reports, there are stunningly positive trends emerging to focus on. Clark Howard, http://www.clarkhoward.com/mobile/2011-05-16/ a well known consumer economists, makes several points that should brighten the outlook of the housing market. 1) Home prices are very low, creating a unique opportunity for people in a position to buy a home. The affordability index for homes is at its best level in the 41 year history of the home affordability index. That means that home buyers are getting more house for their money, and better interest rates. 2) Real estate is looking like a great investment again. As with stocks or anything in your investment portfolio, you want to buy low and sell high. There couldn’t be a better time to buy property than right now due to favorable terms and the lower cost of home ownership all around. 3) For those that have dreamed of owning a second home or vacation home, it is a better time to buy now than at any point in our recent history. More house for the money can also mean better locations for the money, and even homes in desirable locations are less expensive today than they have been over the past 10 years. What actionable advice can you take from this? Well, if you are one of the unfortunate people that encountered a foreclosure or a reduced credit score because of losing income and missing payments, there is still hope for you. There are a lot of properties that have been on the market longer than a year, and often these owners are in need of income themselves. If you can find a house in your price range, you can try a lease-purchase agreement where you lease the home for 1-3 years until your financial and credit situations improve and then you purchase the house. These types of arrangements can work out well for the home owner by increasing their income. It is also favorable for the lessee because they can get into a nicer home at an affordable rate, and still have the option to purchase at a later date. If you are in a favorable financial position, then credit and cash flow are not your concerns. Buyers in this category can cash in on remarkable deals because some sellers are extremely motivated to sell, there are lots of bank owned properties, and their mortgage interest rates will be very favorable. Care should be taken to guard against the “too good to be true” phenomenon because foreclosures can often have hidden issues from disgruntles previous owners. Be sure to have properties inspected prior to purchasing. Don’t make concessions for the sake of a good deal because those concessions could cost you later. So, get out and start looking. There are some great deals in real estate right now with favorable financing options. You may find you can find close to your dream house and still stay within budget. The Mather Company is a Columbia SC Real Estate agency with award winning agents and a committment to excellence.
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