Buy a New Home Now and Reap The Rewards

Posted on December 4, 2009
Filed Under Foreclosures, Home Buying | Leave a Comment

Now is the Time to Buy a Home

If you want a good investment or just want a great place to live at a very reasonable price, now is the time to buy.

The average price for all types of housing was $174,900 in September. This is 8.5% lower than it was a year ago.

The depression is partly due to the distressed properties bringing the average down because they are sold at a discount, which benefits the buyer.

A survey taken this year shows that distressed homes accounted for 29% of transactions in September.

September points to the growing market

Traditionally, home sales drop during September. September’s lower sales are the natural drop from the summer’s high sales. This year sales actually jumped 9.4% in September. First time buyers account for most of the activity.

This gain is the fifth gain in the last six months. Compared to last September, sales are an amazing 9.2% higher. There is currently more sales activity than there has been in at least two years.

A study by the National Association of Realtors shows that first time home buyers account for more than 45% of home sales during the past year.

Total housing inventory at the end of September fell 7.5%, meaning 3.63 million existing homes are available for sale.

September fixed rate mortgage was only 5.06%, down from August’s 5.19% and a lot lower than last September’s 6.04%.

These amazing rates should be an incentive to buy on their own. Homes are currently selling for less than it takes to build a new one. The home price to income ratio has fallen below the historical average.

People are taking action

The great real estate deals are becoming obvious to people in the know and they are taking advantage of the investments. Wherever you live or want to buy the deals are there to be made.

Here are some numbers on regional housing sales that make this obvious:

Northeast

sales increased 4.4% $950,000
11.8% higher than September 2008.
average price $234,700, down 7.0 percent from a year ago.

Midwest

sales increased 9.6% $1,250,000
7.8% higher than September 2008.
average price $147,600, down 1.0 percent from a year ago.

South

sales increased 9.0% $2,006,000
10.8% higher than September 2008.
average price $153,500, down 7.6 percent from a year ago.

West

sales increased 13.0% $1,300,000
5.7% higher than September 2008.
average price $219,000, down 15.0 percent from a year ago.

Foreclosures are high and banks are offering great mortgage rates, so people are looking for, and finding, deals of a lifetime.

The tax credit available to buyers is a win, win situation.

First win – get a good deal on a great piece of real estate.

Second win – get money back for getting that good deal.

Buy now and profit

Momentum from the increased sales is allowing sellers to make a trade or possibly buy another home.

The tax credit could be extended longer, and maybe expanded to include more buyers and this could push the market to a self-sustaining recovery. The average price of homes would go back to normal and the value of the home you bought at a low price would be worth much more.

If you want to sell it, or even borrow money against it, you will be dealing with a more valuable commodity. Buying now means you are rewarded now with a great deal and again in the future with a more valuable property.