The real estate market has been in the doldrums for a couple of years now, and home sales are still sluggish. There are very large inventories of foreclosed homes on the market, and these are causing prices of homes to fall, and this situation is expected to continue at least through 2011. Nobody wants to purchase a home and shortly thereafter see the value of that purchase drop. So should you wait to purchase a home and let home prices drop further?
It may seem counter-intuitive, but the answer to that question is almost certainly no. And in fact when it comes to investing of any kind, be it in real estate or the stock market or anything else, the best approach is normally the counter-intuitive one, and most investment professionals will be quick to tell you that. This is easy to say and hard to do, however, because when the headline news and your emotions are telling you one thing, it is hard to put your hard earned money and your future on the line with an investment that goes against the grain as well as the advice of most so-called experts.
In the stock market, for example, the old saying is to buy low and sell high. Of course that is a great idea, but without a crystal ball you have no way of knowing if the price of your investment idea will go down more or rise more than it has already. Serious professional investors will tell you that you will never buy a stock at its lowest price. The only way this can happen is if you were simply lucky.
As for real estate, the amount you pay for a home is influenced by more than just the price of the property. Another major factor is interest rates, and you need to ask what is likely to happen with regard to those. The Federal Reserve and the government have adopted policies to keep interest rates at extremely low levels in order to spur economic activity. They can do this for a while, but they can't do it forever. Longer term interest rates have been creeping up in recent months, and most financial experts feel this trend will continue. So in that time rates for a 30 year fixed mortgage have gone from just above 4% to just below 5%.
But homes loans at 5% or even less are still a great deal. It has been 50 years since these kind of rates have been available, so this really is a once in a lifetime opportunity for most people. Waiting for home prices to drop a bit more is like trying to squeeze blood out of a rock, especially when interest rates are on the rise. The counter-intuitive move in today's housing market is to buy. The only proviso is that the buyer should have a good job and should feel secure in that job. But the vast majority of people are in that situation. Looking out five years or more, it is hard to believe that a home purchase in today's environment won't look like a brilliant move.
It may seem counter-intuitive, but the answer to that question is almost certainly no. And in fact when it comes to investing of any kind, be it in real estate or the stock market or anything else, the best approach is normally the counter-intuitive one, and most investment professionals will be quick to tell you that. This is easy to say and hard to do, however, because when the headline news and your emotions are telling you one thing, it is hard to put your hard earned money and your future on the line with an investment that goes against the grain as well as the advice of most so-called experts.
In the stock market, for example, the old saying is to buy low and sell high. Of course that is a great idea, but without a crystal ball you have no way of knowing if the price of your investment idea will go down more or rise more than it has already. Serious professional investors will tell you that you will never buy a stock at its lowest price. The only way this can happen is if you were simply lucky.
As for real estate, the amount you pay for a home is influenced by more than just the price of the property. Another major factor is interest rates, and you need to ask what is likely to happen with regard to those. The Federal Reserve and the government have adopted policies to keep interest rates at extremely low levels in order to spur economic activity. They can do this for a while, but they can't do it forever. Longer term interest rates have been creeping up in recent months, and most financial experts feel this trend will continue. So in that time rates for a 30 year fixed mortgage have gone from just above 4% to just below 5%.
But homes loans at 5% or even less are still a great deal. It has been 50 years since these kind of rates have been available, so this really is a once in a lifetime opportunity for most people. Waiting for home prices to drop a bit more is like trying to squeeze blood out of a rock, especially when interest rates are on the rise. The counter-intuitive move in today's housing market is to buy. The only proviso is that the buyer should have a good job and should feel secure in that job. But the vast majority of people are in that situation. Looking out five years or more, it is hard to believe that a home purchase in today's environment won't look like a brilliant move.
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Go to Colorado Springs Real Estate Agent and learn about the real estate market in the state. You can also get tips for the best deal on a Home Mortgage.
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