April 28, 2009 // Franchising.com // Morris Plains, N.J., – Whether buying a car, picking a stock or purchasing a home, it's natural to want to get the best value possible. Yet waiting to try and make your purchase at the absolute lowest price can be tricky – if not impossible.
According to James M Weichert, president and founder of Weichert, Realtors, one of the nation's largest independently-owned real estate companies, when it comes to real estate, holding out for a slightly better deal can also be costly.
"No one has a crystal ball. Despite what many financial experts would have you think, it's impossible to predict the exact moment prices will be at their very best," said Weichert. "The only way to really know when prices have hit bottom is after they start coming back up. But waiting until that point cost buyers in terms of money and buying potential."
Instead of trying to time the market for the perfect deal, Weichert recommends those interested in becoming a homeowner take advantage now of the unprecedented combination of affordable prices and historically-low interest rates that he says has created a sort of ideal 'buying zone.'
After several years of declining prices, home affordability is at its highest level in decades. In fact, the National Association of Realtors' (NAR) Housing Affordability Index recently rose to its highest level since it began the index nearly forty years ago. At the same time, the cost to borrow money is at a historically-low level with interest rates for a 30-year fixed mortgage dipping under 5 percent for the first time since the 1950's.
When you factor in the $8,000 federal tax credit being offered to first-time home buyers, it is hard to imagine buying conditions getting much better. And it seems a large number of first-time buyers agree. In fact, the NAR recently reported that first-time buyers accounted for more than half of all home sales in the month for the first-time ever.
Perhaps, the biggest reason first-time buyers may feel more comfortable purchasing a home today than a year ago is because they are optimistic about the prospects for the housing market in the near future. In particular, the government's ongoing commitment to stabilize home prices and keep interest rates low to stimulate the economy seems to have instilled new confidence in buyers.
"Those considering purchasing a home have to ask themselves if they think the home they can buy today will cost more or less a few years from now - not just in terms of price but also mortgage," said Weichert. "While it's always possible conditions could improve further, it's more likely that we'll see a drop in the record-high affordability and historically-low interest rates that are making now such a great time to buy."
With the tax credit set to expire on December 1 of this year, Weichert urges all buyers, but particularly first-time buyers, who ultimately want to capitalize on this great buying opportunity to not wait until it's too late.
"Thinking about missed opportunities in life can be unpleasant, particularly the ones we knew about but didn't act upon. We are in the midst of a tremendous buyer's market right now but it isn't going to last forever. Inevitably, when we come out of a market like we have today, the most common thing I hear from buyers is regret that they didn't act sooner," added Weichert.
Weichert has nearly 18,000 sales associates in approximately 500 company-owned and franchised sales offices in key markets throughout the U.S. A family of full-service real estate and financial services companies, Weichert helps customers buy and sell both residential and commercial real estate, and streamlines the delivery of mortgages and home and title insurance. Each Weichert franchised office is independently owned and operated.