Its difficult for many people to accept the fact that now is a great time for first time home buyers to get into the market. With the media producing Continuos Negative News (CNN for short) about the national state of the housing market, buying your first home may be something you are thinking should wait until all this blows over but concider the following facts.
1. This is officially a "buyers market" which by definition means that you as a buyer have more choices. Any time you have a wide number of choices when buying anything you can select what is right for you. When the choices are greatly reduced as was in the case of the 2004, 2005 feeding frenzy in our local market, home buyers had very few choices of homes available to them in their price range and bought homes they kind of liked rather than the ideal home for them. There were bidding wars on many homes which drove prices way over the sellers original asking price. Back then there were a vast number of investors and speculators buying up homes that you would have been in competition with. This group of buyers although still out there are few in number right now compared to those years.
2. Because this is a buyers market, many sellers are willing to assist with closing costs and even down payment assistance programs through the Ameridream or Nehemiah FHA programs. What this means is that if you purchased a $200,000 home in 2005 and were able to secure 100% financing, you still would have had to have around $6000 to pay for closing costs and pre-paid expenses plus any inspections performed. Today a $200,000 home could be purchased with the seller agreeing to pay $6000 towards the FHA down payment and another $6000 for your closing costs. This gives you a $12,000 advantage on buying in this market than back then when the media was reporting the oposite of what is today and if that is not enough to convince you right there then the icing on the cake is that a $200,000 in todays market would have cost you more like $250,000 plus back then.
3. Back in the Great Depression a family know as the Rockefellers, were in a position to take advantage of a down market. If my history serves me right, that choice to buy when everyone else was selling paid off for them when things turned around again. History has a habit of repeating its self and no market stays down forever. You may not be in the same position as the Rockefellers were however you may be in a position where you can take advantage on a smaller scale.
4. You need a roof over your head. Your options are to rent, lease option or buy a home. The United States promotes home ownership and gives tax incentives for people who do. If you are going to be requireing a different home size or location in the next few years then rent as that gives you the flexibilty to be able to move around however if you have found the place you are going to be living for the foreseable future then why not buy. Remember the media is focusing today on the difficulty that home sellers are having right now. They are not reporting on the great oportunities that home buyers are finding out there. Remember Continuous Negative News, CNN, not Continous Possitive News. Look past the headlines.
5. Back at the peak of the housing market new home sales offices were in many cases having to place their buyers in a lottery system for the next release of land lots. You simply could not pick out the perfect lot for you, you were lucky if you got selected out of the hundreds of buyers for those few home sites. A diiferent case today. You now have options again and builder spec homes available if you needed a quicker closing.
6. The industry proffesionals such as lenders and REALTORS are being weeded out. There is a saying that even a turkey can fly in a hurricane and the hurricane that blew through in the boom years carried a lot of turkeys with it unfortunatly. In todays market and any market it is up to you as a buyer to ensure you have the correct people around you giving you options so you can make educated decisions about what could be the single largest financial purchase you make. Don't leave it to a turkey to advise you.
7. Pride of ownership. This last one is an experience that cannot be bottled. If you own your own property you are the one that decides what color to paint the walls, if you can build a pool in your back yard or make any other changes to the home, because its your home and not just a house you live in.
Homes are becoming affordable again and although lending pricatices are tightening up, that can only be a good thing for the long term state of the housing market. Until you start to look into what your options are you may never know what oportunities may be passing you by in this market we are in right now.