Is it a good time to buy a home?
Is it a good time to buy a home? 'Maybe' means 'yes'
NEW YORK -- Oct. 25, 2006 -- Many homebuyers are asking themselves if they should buy a newly built home now, or wait for prices to fall, according to a new report on RealEstateJournal.com, The Wall Street Journal's guide to property.
Last summer, price appreciation rates ran at double-digits in many parts of the country and investors knew that in nine months or a year, when the project was finished, they could flip the unit to a new buyer at a profit. A year later, in July 2006, new-home sales were down 21.6 percent, housing starts decreased 13.3 percent and permits were down 20.8 percent. Inventories of unsold new homes are now at a 6.5-month supply -- an 11-year high.
"The recent downturn in housing prices may enable home buyers to negotiate extra incentives from new home builders," says Lauren Kim, senior editor, "Keep an eye out for ads … to see if the builder is offering any new buyer incentives, like buy downs on mortgage interest rates or free finished basements."
Buying a home is a major financial commitment and homebuyers in today's market are understandably worried that their new home's value will fall -- before they even move in. However, a report by Harvard University's Joint Center for Housing Studies notes that sharp declines of 5 percent or more seldom occur in the absence of severe overbuilding, dramatic employment losses or a combination of the two.
Homebuyers should balance the risk that home prices may fall with the reality that they'll never be able to anticipate the exact moment that prices will reach bottom.
"The best buying opportunities come when markets are down and sellers are a little more accommodating," says Kim. "Do your homework before you buy, and be prepared to hold the property for a long time if you want to realize large gains."
Source: Planet Realtor
NEW YORK -- Oct. 25, 2006 -- Many homebuyers are asking themselves if they should buy a newly built home now, or wait for prices to fall, according to a new report on RealEstateJournal.com, The Wall Street Journal's guide to property.
Last summer, price appreciation rates ran at double-digits in many parts of the country and investors knew that in nine months or a year, when the project was finished, they could flip the unit to a new buyer at a profit. A year later, in July 2006, new-home sales were down 21.6 percent, housing starts decreased 13.3 percent and permits were down 20.8 percent. Inventories of unsold new homes are now at a 6.5-month supply -- an 11-year high.
"The recent downturn in housing prices may enable home buyers to negotiate extra incentives from new home builders," says Lauren Kim, senior editor, "Keep an eye out for ads … to see if the builder is offering any new buyer incentives, like buy downs on mortgage interest rates or free finished basements."
Buying a home is a major financial commitment and homebuyers in today's market are understandably worried that their new home's value will fall -- before they even move in. However, a report by Harvard University's Joint Center for Housing Studies notes that sharp declines of 5 percent or more seldom occur in the absence of severe overbuilding, dramatic employment losses or a combination of the two.
Homebuyers should balance the risk that home prices may fall with the reality that they'll never be able to anticipate the exact moment that prices will reach bottom.
"The best buying opportunities come when markets are down and sellers are a little more accommodating," says Kim. "Do your homework before you buy, and be prepared to hold the property for a long time if you want to realize large gains."
Source: Planet Realtor
posted by Dan Forbes at
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