In the housing industry, the general consensus of the public is that it is the worse time to buy a house. It is so bad that in some parts of the country, house prices have plummeted to record levels in past twenty years. Some areas have house prices that are approaching a threshold that they cannot get any lower. Even though they are approaching a certain threshold, they could still even go lower. Why are housing prices dropping so far off the chart? That is because people are not buying houses.
Why aren’t people buying houses? The general pubic is in a state of panic that they may not have a job soon, they may not have the ability to repay the loan, and the house value may drop lower so they are staying out of the market. Many people are holding back from buying a property because of fear instead of reality. The news has scared a lot of potential buyers out of the marketplace, and they will not return until they get the all clear signal.
The Art of Market Timing
Many potential buyers are holding on to their cash with hand and fist. They are waiting in anticipation for the bottom of the market. Te question is will they get the market bottom, and if they do, then will they be able to choose a dream house? Will they be able to get the best interest rate?
Recently, interest rates have just dropped to all time low levels to try and get the market to grow again; however, it does not seem to be working. A lot of houses are still available on any property listing website; however, if you are in the market for a new home, could this be your golden time to buy?
Your Optimum Time to Buy
To help you determine if now is the best time for you to buy a home, then answer the following questions:
- Is my job secure and recession proof? Do I have at least one to two years left in my contract?
- Do I have emergency funds to cover my mortgage payments if I have to work for less pay?
- Will I be planning to live in the same house for at least five years?
- Am I looking for a sound financial investment that has a lot of opportunity for growth?
- Do I want to gain residual income from a rental property?
If your answered yes to any of these questions, then now may be your optimum time to buy a property. Right now, there are ample properties available at discount pricing. You can find properties priced anywhere from 10% to 50% off the prices from a year ago. Also, most of the listed prices are ’starting prices’, and you will be able to negotiate a lot lower price. Many people are looking to move out of properties out of fear of losing there job, missing mortgage payments, and foreclosure. If you do not have this fear, then you should be able to make some easy money and find an amazing home to raise your family.
The first step to determining if this is a valid option for you and your family is by looking at the numbers. Calculate if you can afford home ownership even if you lose your job and have to live off your savings for awhile. Calculate how much your investments have gone down versus the cost of purchasing a rental or investment property. Most likely you will be incredibly surprised at the large return you would have made. Consider retiring on the equity that you build in properties instead of a 401K or RRSP program.
The best time to buy a property is when you find your dream home and plan on living in it for the long term. If you are only looking to speculate on purchasing a property and ‘flipping it’, then you are likely to loose a lot on the fees; however, if you want to spend a good portion of your life in this property, then it could be a great time to buy.
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#1 by Queretaro at September 18th, 2009
I’ve recently started a blog, the information you provide on this site has helped me tremendously. Thank you for all of your time & work.
#2 by Top Home Loans at September 20th, 2009
Great to hear! Let me know if you have any questions, concerns, or if you have any suggestions for articles in the future.