Wednesday, April 1, 2009

When Home Prices Hit Bottom

By: Bovemsa Cheung

It is a difficult decision deciding when to buy and invest into your first home. Deciding when to sell is another difficult decision because you do not know if you should wait. The third problem is seeing your asset decrease in value. According to some economists they forecast that home prices will bottom out at the end of this year. The peak of house price falling was in 2006 and since then they have plummeted about 37%. What may delay this housing rock bottom decrease are President Obama’s many recovery efforts such slow foreclosures, goose bank lending, and a tax credit to most 2009 buyers who have not owned in the past 3 years. After home prices reach their lows, Mike Larson, real estate analyst think that they will probably stay there for a few years as the economy slowly struggles back to its fees (about 10 years). The most important thing when purchasing a home is its location.

Some tips for buying a house are if your market is forecast to fall 10%, bi at least 10% less than the home’s current value and if the seller refuses than find another house because there are so many out there. If you want a great deal then maybe you should look for foreclosures. Another option are short sales where bankers allow homeowners to sell for less than they owe however this process can take up to 6 months and fall apart in the last minute. Since prices are continuously dropped perhaps it is better to invest in a vacation home, a future retirement home, or a rental property that you plan to hold for at least five to seven years.


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