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There are six reasons that TODAY may be the BEST TIME in 40 years to BUY a HOME.
1. Home Prices are Down
2. Interest Rates are at a 40-year Low
3. Housing Inventories are High
4. Real Estate Property Taxes are Down
5. Let's Ride the (slow-coming but eventual) Economic Recovery
6. Avoid the "Lost Equity" Syndrome
Is now the best time? For many it is. For some it’s not. For some, for those families do have the confidence in their personal situation to pursue the American Dream of home ownership, it's somewhat of a "perfect storm" with our six reasons.
So, is now the best time, the right time, to purchase a home in central Indiana if you have the ability to do so? The time to take full advantage of this opportunity is only limited by the slowly-emerging economic recovery and the changes likely to occur as a result. If your personal finances and employment situation allow you to move forward with confidence, you don’t want to be looking back 6, 12 or 18 months from now wishing you had taken advantage. In buying a home for sale, this could be the only time you might have 20/20 foresight.
Yes, for many, today is the best time to buy a home in the past 40 years.
#1: HOME PRICES ARE DOWN
Nationally, home prices are down nearly 30% from their peak.1
- The median sales price of homes is down 5.19 % in central Indiana since July of 2006.2 Many homeowners have experienced greater declines in value.
- Lower home prices means more house for your dollar.
- As the economic recovery continues to build, home prices are expected to rise.
#2: Mortgage INTEREST RATES ARE AT A 40-YEAR LOW
Mortgage interest rates have hit their lowest levels in 40+ years. And whlie they show no immediate sign of rising, anything can happen.
- Lower mortgage rates mean more home for your monthly housing payment.
- Interest rates can’t realistically go significantly lower.
- As the economy recovers, interest rates are expected to rise.
#3: HOUSING INVENTORIES ARE HIGH
The number of homes for sale in central Indiana is 18,000+ properties. That number is historically high. For you, this means there is an excellent selection of homes in every price range; new and resale.
- Plus, the increased competition means serious sellers are forced to have their property in prime “move-in” condition to attract buyers.
#4: REAL ESTATE PROPERTY TAXES ARE DOWN
- The Indiana legislature passed legislation substantially reducing the property tax burden traditionally carried by homeowners. The law limits annual property tax bills to 1% of the market value for principal residences.
- This is a reduction in most homeowners’ tax bills making it more affordable for you.
#5: NOW IS AN UNIQUE OPPORTUNITY TO RIDE THE ECONOMIC RECOVERY
- As the national and local economies continue to grow out of this recent recession, the housing market will begin to grow as well. More potential homeowners will have the opportunity to take advantage of the market and demand will balance with supply. What does that mean? The laws of supply and demand tell us that home prices will begin to rise in response.
- Those who took advantage of the depressed housing market and purchased property (this means you) will experience a greater growth in their home's value. Today's buyers have a better chance to ride the wave of the economic recovery.
#6: AVOIDING THE “LOST EQUITY" SYNDROME
- Homeowners who want to sell their existing home and buy-up need to avoid what is being labeled “the lost equity syndrome.” Of course your home may not sell for as much as you might expect, or hope for. But the home you're moving up to will more than make up that difference. Understand that you can sell your home and take a loss of equity on that sale, but make that loss up - and more - because higher priced homes have taken an even greater hit from the housing recession.
- The seller of their new home takes that equity loss. The “buy-up” buyer’s resulting equity position can often be a net gain.
At Carpenter REALTORS®, we believe this is an optimum time in the real estate cycle for many to purchase a home. Deciding if it's the right time for you and your family simply depends on your personal situation, your confidence and your ability. The unique combination of low home prices, low mortgage rates, abundant selection in all price ranges, motivated sellers and falling property taxes offers a once-in-a-generation opportunity for prospective homebuyers. As the economy recovers, mortgage rates are expected to rise; home values will be restored and continue to grow; and sellers will find greater numbers of buyers.
And, the unique opportunity presented by today’s real estate market will be lost.
1 Standard and Poor’s Case-Shiller Index.
2 “The median sales price of homes is down 5.19% in central Indiana since July 2006.” SOURCE: Metropolitan
Indianapolis Board of REALTORS® BLC July 2006 vs. July 2010.
3 “Lowest mortgage interest rates in 40 years”. SOURCE: Wells Fargo Home Mortgage,
Fannie Mae Mortgage Interest Rate Chart.
4 “The number of homes for sale in central Indiana is in excess of 18,000 properties. That number is historically high”. SOURCE: Metropolitan Indianapolis Board of REALTORS® BLC residential inventory on 09/27/10.
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