It's a Buyers' Market, but Does That Mean It's The Right Time to Buy?

Many potential home buyers want to know if this is the right time to get back into the housing market. The real estate sector has been one of the hardest hit sectors of the economy. The experts seem to be divided as to whether or not this is a good time to buy a home.

It may take years for the economy and the housing market to fully recover. Calling the bottom of the market is not possible until values have stabilized and are on the increase across the nation. Despite all this uncertainty, could now be the right time to invest in a home?

A brief Internet search will show many different opinions on whether to buy now or wait. Even so, it may be the right time for YOU to buy, based on lower property pricing and historically low mortgage rates. Before you decide to invest in a home, it is vital that you educate yourself about the current market situation and determine your needs and time frame.

Many people believe that because property values have fallen so low, homes are now priced below their market value. While there are certainly some homes on the market now that ARE undervalued, or priced lower than what the market can bear, most homes are not underpriced. Even REO homes (those that are now bank owned due to foreclosure or deeds in lieu of foreclosure) are not always priced below fair market value.

Yet in the middle of all the uncertainty about when the housing market will fully recover, and whether or not housing values and prices will fall further, there are some facts that do support buying a home now. Mortgage rates are approaching historically low levels, and house prices are at values not seen since 2003. This could be a very good time to buy if you intend to keep the property for several years and don't mind waiting for the housing market to stabilize.

According to most experts, low mortgage rates are not likely to last beyond the first quarter of 2010. The Feds have been buying mortgage backed securities to subsidize the current mortgage rates, but that subsidy will end March 31, 2010. At that point, most analysts believe rates will rise.

Lower mortgage rates mean that buyers may be able to qualify for more home at the same monthly payment. There is no way to know now how high or how quickly mortgage rates might rise, but rates are currently about 1% – 1.5% below where they were merely a year ago. That can create a substantial opportunity for a home buyer.

In addition to the low prices and low mortgage rates, the government is encouraging home purchases with some generous tax credits. First time home buyers can get a credit of up to $8,000 (existing home owners buying a new home can get up to $6,500). Buyers must have accepted purchase offers no later than April 30, 2010, and must close on that purchase by June 30, 2010, in order to qualify for the tax credits. Some states are offering further cash incentives.

Historically, the United States has experienced many recessions. In fact, boom and bust cycles are an economic norm. While this recession has been the most severe since the Great Depression, no one doubts that it will end and housing values will rise again. Historically, property has been a great investment. It is very likely that those who purchase now will reap the financial benefits in a few years.

Luxury Real Estate in Southern Florida offers in-depth market knowledge and the resources of EWM and Christie's Great Estates, in addition to local expertise and global network access to your real estate transaction. This article powered by SEO 2.0 Services