I recently read this headline and thought is this a true statement? After pondering the question "Why is it smart to buy real estate now" I concluded that in fact this is a true statement. Here are the reasons why.
1. Prices of most homes have dropped significantly and in some areas as much as 75%. What this means is the only direction for prices going forward is up. Will prices of homes drop lower, perhaps, but just like trying to time the stock market, it is difficult to time the real estate market.
Here in California and specifically in Contra Costa County (where I live), prices data shows we hit the bottom in 2008 and have been going up ever since. Inventories in certain price ranges have dropped and we are seeing days on market decreasing to less than three months.
That doesn't mean that we will see home prices skyrocket to unrealistic levels as we had in the mid 2000's. But what it does mean, those in the know and are buying homes now.
2. Interest rates are the lowest they will ever be. They can't and won't stay in the 4% to 5% range forever and the prediction is that interest rates will start to go up on 2011. Looking back to 2003 thru 2007 interest rates were in the 6.25% range and actually crept close to 7%. At that time, everyone was excited because just a few years prior to this time period interest rates were up to 8.5%. So when the rates dropped under 7%, it caused a big stir in the market. So rates in the 4% range are unprecedented and should be taken advantage of right now.
Real Estate is an asset and a valuable one which savvy investors understand. There are investors in our area in California that are buying blocks of homes. It was unheard of to find homes in the $200K range, but there were plenty to go around over the past year to year and a half. These investors may rent them now, but look to reap the fortunes in the future - and probably not the too distant future - when prices go back up.
This is also a fantastic opportunity for the first time home buyer. You can get so much more home for your money and in areas that may have been out of reach for many.
If you are on the fence waiting for the right time, this may be the right time.
Linda Urbick - real estate professional serving clients in the purchase and sale of homes in the Contra Costa County area of California. For information on the market or real estate in general, visit my web site lindaurbick.com and send me an email.
Article Source: http://EzineArticles.com/?expert=Linda_A_Urbick
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