After a decade of tremendous highs and devastating lows in the housing market, it’s understandable that so many people are hesitant to jump into any real estate transaction. Who doesn’t want to avoid “catching a knife as it falls”? Many have experienced that frustration and have found themselves underwater. However, we find ourselves at a turning point and now is a great time to buy a home.
Christophe Barraud, an economist at Market Securities-Kyte Group in Paris and, according to data compiled by Bloomberg, the 3rd best forecaster of home prices in the past 2 years said, “The housing market keeps on recovering…Interest rates are staying low, which means more 1st time homebuyers.”
Enthusiasm for real estate is returning as well. On March 27th 2013, CNBC Real Estate Correspondent, Diana Olick tweeted, “Searches on Yahoo! for new homes were up 158% from last feb/mar (when looking at 30 days ending 3/12)”. In real estate as in stocks, where the crowd is seen to go the mob follows; this upward trend is sure to continue.
MSN Real Estate notes that home prices have taken the biggest jump in 7 years (in January) with an average of 13.13% gain among the California cities (San Francisco, Los Angeles, San Diego). Also, Freddie Mac states that Home prices in 20 U.S. cities climb by most since June 2006.
Those looking into investment real estate, you may be interested in what Forbes has to say, “homes will go back to being a place to live because the likely 2-3% per year growth trend won’t be enough to justify flipping.” If that worries you, perhaps consider seeking passive income by buying a home and renting it out. However, Barclays’s (and others) predicts home values will rise 6%-7% this year. Either way, prices are on their way up.
If you’re thinking of following Warren Buffett’s recent advice to buy with cash while prices are very depressed, do so now. Prices are on the upswing, though they are not likely to swing up to the 2004-2008 extreme high’s anytime soon.
In case you’re concerned about selling your home, a good first step is to check the value of your home and compare it against what you bought it for to see how much value you’ve gained. Of course, sometimes life circumstances override financial interest. You can contact me here or call me (530) 295-2901 to discuss what your options look like.
Either way you phrase it, now is the time to buy!