Pura's Blog

I am often asked, "Is this a good time to Buy?" or "Do you think the housing prices will continue to go down?"

I will address the questions respectively. 

Is this a good time to buy?  This is a wonderful time to buy.  The market has experienced a major correction and the mortgage interest rates are low.  The key to buying is to identify your needs and buying within your means.  Ask yourself: what can I afford? What size home do I need now and in the next five years? What neighborhood would I like to live in?

The next step is to begin preparing.  Go to your bank and get pre-approved for a mortgage.  Why is this important? Well, once you locate a property, you are ready to put in the offer.  Being pre-approved shows the Seller that you are serious.  It provides some leverage.  It shows you have done the leg work and are ready to buy.  Moreover, being pre-approved is the tell of the tape - you will know what you can afford.  It streamlines your property search to meet your financial parameters.

Do you think the housing prices will continue to go down? This question is the million dollar question or, more appropriate with the sub-prime fallout/bailout, the billion dollar question.  I do believe that there will be a further correction in the market due to increased housing inventory coupled with tightening lending practices by financial institutions.  That is not bad - that spells opportunity for qualified buyers. Remember, a pendulum swings both ways. If you wait for the pendulum to swing the other way, you are following behind the curve of correction and it could mean a missed opportunity.

There is no way to predict the bottom of any market.  Even the economist and Wall Street analysts are unable to definitively determine how deep a cut the market will take.  Why? there are too many variables - job sector, core price index, consumer confidence, consumer spending, etc..  However, the fact remains that land is finite and we have an ever growing population.  As with all limited resources, when demand increases and supply is limited, the price goes up - economics 101.  

That is why I say, BUY! Or in the words of Jim Cramer, [Mad Money] Booyah - Buy, Buy, Buy