House purchase in 2007
originally posted: 11/22/2006 reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email asktony@tonynovak.com.
Q: I was planning on buying a bigger home within the next few months or in the beginning of 2007. With all of the bad news about housing lately, is it still a good idea to buy a house now?
A: The value of an average home dropped about 10% over the past year according to the latest government survey. But the point is that this happened before most owners and investors realized that such a significant downturn was in play. By September 2006 there were already signs that the worst was over. Inventory of homes for sale is dropping, interest rates are stabilized and may drop again, and the stock market is setting new records that boosts confidence and wealth for many homeowners. So, yes, this is a great time to buy a house; perhaps the best time we have seen in many years. The best opportunities now are with properties that have languished on the market for more than six months. Owners who are still trying to sell may be weary enough to drop the price by more than enough to justify the purchase. Even new home builders are forced to drop prices or even put new units up for auction. As far as timing the transaction, it might be best to enter an agreement this year and make settlement early next year.
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