Very much like a handicapper picks a horse race, I’m going to make this call. It’s not as if I can see the future, far from it, but I can see the past, and past real estate markets tell us a great deal about future markets. And, since fortune favors the bold, I’m making this call with the wind at my back. Ready? Here goes, today. Now. This is it. It is time to buy. Prices have bottomed, interest is low, and deals aren’t going to get appreciably better.
When evaluating your particular circumstances, if you don’t presently own a home, you will undoubtedly face the decision of whether you should buy or rent a home. With the constant deluge of bad economic news we have all faced since last Fall, most especially concerning the real estate market, many are understandably hesitant to take the plunge into home ownership. However, as Tony Curtis once said in a popular 1960s comedy movie, “In confusion, there’s opportunity.” This phrase couldn’t be more true of today’s market conditions. For those of you too skittish to consider buying, I’ll attempt to locate and post some links to reputable rental services in the next few days to assist in your desire to remain a renter. For those among you who are thinking about buying, but remain unconvinced, consider this:
1. The easiest way to make money in real estate is to buy low and sell high, and right now you’ll be buying low. Many areas have undergone tremendous price setbacks. This is certainly to someone’s disadvantage, but not yours. Embrace it, enjoy it, and get a good deal. But, don’t get too caught up in this aspect of the home buying process. It is not always the property with the steepest discount that is the best deal. Many of the best housing markets in the country are weathering this storm with only minor pricing setbacks. I’d rather be in the DFW Metroplex than anywhere else in the country, but there are steeper discounts in Florida.
2. If you are a first-time homebuyer, the US government is handing out money; by the truckload. You can have some of it, absolutely free, you just have to buy a home to collect it. In case you haven’t heard, there is an $8,000 tax credit offered to first time home buyers. In addition, certain states and cities may have their own programs which provide additional rebates, discounts or incentives when purchasing a home in their municipality.
3. Interest rates are at historic lows – an overused term if ever there was one, but let’s just say they are the lowest rates I’ve seen in my 45 years – which can save hundreds or even thousands per month from historically normal rates. For example, at the new neighborhood I am building in Plano, Lexington Park at Rice Field, the low fixed rate mortgages we have made available to our buyers save them about $600 per month over what they would have paid a short time ago for a property of equal price. If you opt to go with a fixed rate loan, your mortgage will stay the same for the life of your loan as opposed to renting a property from a landlord or management company who makes it a habit of raising the rent each year.
4. Homebuilders are having a tough go of it in this environment and almost all builders are offering substantial price incentives to keep the inventory moving. Again, using Lexington Park at Rice Field as an example, we are presently offering price incentives of $40,000 per home. This is a monumental discount from normal pricing and, when combined with cheap interest rates, the overall cost of ownership has never been so low. Check out our Advertised Specials, which change from time to time.
5. Recently revised Fannie Mae underwriting guidelines help potential homebuyers by taking careful consideration to the quality and value of a property before writing a loan, which helps ensure the home you are looking to buy is worth its asking price. In other words, FNMA is helping to insure that it is safe for you to buy.
6. If the time ever comes for you to sell your home in the future, there is a capital gains tax exemption that will save you thousands of dollars in in Federal Income Taxes if you sell in the timeframe which you would otherwise have to pay full capital gains tax. Because the housing market is currently in a slump, you have a very high probability of selling your home in the future for more than you paid for it, allowing you to make a profit on your home purchase with minimal taxation.
Countless numbers of properties can be found at prices not seen in decades. Foreclosures have driven home prices down to the point that it is likely to be less expensive buying and owning a home, than it is renting. Now, when it costs you less to buy and own than it does to rent, you really have to consider the wisdom of remaining a renter.
Lexington Luxury Builders is certainly ready to sell or build you a home and timing has really never been better. We have assembled a cooperative team of very experienced professionals to assist you with the building or buying process. And if a Lexington property isn’t right for you, we’ll be glad to refer you to some of the best realtors in the Dallas Metroplex to assist with your purchase. Don’t wait, between the low interest rates and price incentives, our homes will not last long.