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Buying to fit your lifestyle

By Justin Hunter

As the market edges closer to the bottom than it has in about a decade, there are some obvious questions that have been circulating around the industry.

How low will it go? For how long will the slowing continue? These are the two primary questions that have investors and home owners alike buzzing.

Many potential home buyers and investors struggle to identify when the market will be in their best interest to purchase. But relying solely on the market’s strength or weakness may not be the best way to ensure a successful real estate transaction.

Realty Times columnist, Broderick Perkins poses a different factor that will determine if you are ready to buy real estate, in his article, “It Is A Good Time To Decide,” which was publish October 27, 2006.
“Is it a good time to buy?” is the question random people will ask anyone they know who is remotely affiliated with the industry and then a half hours conversation will originate sparking enthusiasm and promises to cash-in this time when the market is prime for the picking.

“Given no one can actually pinpoint the bottom except in hindsight -- after the market rebounds -- waiting for that elusive place in time is as risky for buyers as it for sellers waiting for the market to peak.”

“But before you rush out the door in a frenzied attempt to stay one step ahead of the bottom feeders, remember that a ‘good time to buy’ for you may not be the same ‘good time to buy’ for someone else.”

Considering when the perfect time to buy depends more on your personal situation. The best, or basically the only good time for you to buy is when owning is cheaper than renting and buying a home is a natural fit for your financial needs, goals and lifestyle.

Of course your goal and ideal situation (especially investors) is to buy low and sell high but you also need to consider your goals and plans for your family and the future.

“‘Today, with the real estate market slowing in many parts of the country, all the market fundamentals show that buyers are now in the driver's seat,’ said Jerry Howard, CEO of the National Association of Home Builders (NAHB), in a recently release.”

“‘Consider the facts: prices are competitive, rates are low, the selection of homes is high in all price ranges and sellers are ready to bargain,’ he added.”

However, if you are an investor and start buying multiple properties now, you may have to wait a month, a year or more to be able to sell for a profit since prices are declining.

On the other hand, if you wait too long to jump in the market, prices and appreciation may begin to swell again and you could miss your opportunity.

“‘First-time home buyers who choose to ‘play it safe’ and keep renting are essentially postponing the opportunity to build household wealth. Currently, with rental vacancy rates tightening, they can probably expect to see an increase in the rent they pay. No one can accurately predict the peaks and valleys of the housing market. If you try waiting for the absolute best deal, you could end up literally waiting for years, missing out on the opportunity to become a homeowner while prices are moderating,’ NAHB advises.”

The housing market will appreciate. Historical figures represent that no matter when you buy, you will make a significant profit when you decide to sell. Some people may just be able to earn this profit quicker than others depending on when they bought.

So the best advice on when to buy is to do it when you are financially ready. Interest rates and prices may rise if you wait too long and you do not want to default on payments if you buy too soon and do not have the necessary finances. It is very dangerous to attempt to predict the market.

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