Why it is a Good Market to Buy Real Estate

Posted on: October 14, 2007

A large inventory has been spurred by fewer sales in the market; this is partially due to the fall-out of the sub-prime lending market. With the foreclosure shake up it is more difficult than it was 6 months ago to get a loan, as eligible credit scores are raised and more restrictions applied. If you have a job and pay your bills on time, you should have no trouble getting a great loan and reasonable rate.

The indications are that we can expect a general price decrease of 7.2% over the next 24 months. This is not a short termed anomaly.

Who can benefit from this soft market? Here are just a few scenarios:

First time buyers with good credit. Interest rates are still low, prices soft, and inventory is high. There are some unique programs available aimed at converting renters to homeowners. All of these add up to a good deal for those who lack a lot of equity to invest.

Investors. This is the perfect time to buy a home for rental purposes. Lower prices and good rates improve cash-flow. Now is a good time to buy low, enjoy the tax and other benefits of owning a rental; you’ll also enjoy the capital gains when the market recovers.

Flippers. Those who buy a distressed homes to renovate and resell could do well in this market. This business plan works best in a buy low, sell high type market. Now is the time to buy low, work on it while living in it or renting, and then sell when the market recovers.

Same city move-ups. If you are contemplating moving up to a more expensive property, do it now! Homes priced below $300,000 are only seeing $20,000 to $50,000 price reductions. Homes priced over $600,000, I have seen instances where multiple reductions of $100,000 take place. New construction is in the cellar. Buy now before the existing inventory goes away.

Tax Purposes Buy before the end of the year and you will enjoy an added tax deduction on your taxes. Soft home prices make this even more tantalizing.

I heard a good analogy recently, “The market is like the ocean. You can’t change it, you can only navigate it.” Need help navigating the real estate waters? Talk to your PortlandRealEstate.com Realtor today.

Written by Heidi Aspinwall, Realtor® for PortlandRealEstate.com