This headline is one of the most accurate statements to date. But before I go any farther you must understand that this statement assumes you're in a position to afford a new home. If you don't know how much you can afford and have not spoken to a lender or financial institution, then stop your home search and get your affairs in order!
For the sake of this post, I'll assume you've done your homework and have been pre-qualified by a lender. You're now in a position to take advantage of the amazing opportunity that the housing market is providing. Today is a great time to buy a home! Yes, you've heard me correctly and yes I understand that I'm in the industry and most likely come across as having a bias opinion. But the great thing about that statement is that the numbers don't lie. Let me show you why buying a home in today's market is a great financial investment.
In this exercise let's assume you currently live in a $200,000 house and are in the market to purchase a new home for $300,000. In today's economic climate housing prices in "your market" have dropped 25% across the board. You understand this reality and sell your current home for $150,000. I know, you're disheartened at your loss of $50,000 on the sale of your home. But you now purchase your new home at that same 25% price reduction for $225,000. A savings of $75,000 from the original price! When comparing the sale of your current home and the saving from your new home, you actually saved $25,000.00!!!! Not only did you just save on the overall price, but your new mortgage is for a lesser amount and you've taken advantage of the historically low mortgage rates. The overall savings for your new purchase GREATLY out weighs the equity loss on your original home.
Please remember that when the market is "hot" the opposite occurs. You get more money for the sale of your home, but you also pay more for that new home. Let's assume the market is "hot" and prices have risen 25% across the board. Instead of selling your existing home for $200,000 you sell it for $250,000 (an increase of 25%) and make an extra $50,000 BUT instead of buying that new home for $300,000 you now buy it for $375,000 (an increase of 25%) and an extra cost of $75,000!!! You made $50,000 extra on your sale, but are paying an extra $75,000 for your new home. You end up paying an extra $25,0000 more for that same house because you bought it in a "hot" market. Not to mention your mortgage if now for a higher amount. Higher mortgage payments, higher real estate taxes, more money out of your pocket!!!
Whenever I talk to people about "Today" being a great time to buy, they are quick to tell me I'm crazy, but if you do the math and understand exactly how your money and the market works, you'll quickly see that a "Down" market is a great time to BUY.
Remember, there's never been a successful businessman or businesswoman who has made money from buying when a market is 'hot' and selling when it's 'hot.' Business 101 reminds us of the basic principal of buying low. Don't complicate the situation, understand your financial position and if you're ready to make a new home purchase, be confident that there's never been a better time to buy than "Today."
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