The answer to the "Should I buy a home now?" question has to be handled with honesty from the customer perspective.
That seems like an obvious and sensible thing to say. But when your livelihood comes from people buying and selling houses, you can fall in the trap of saying things to a customer like, "Everyday is a good time to buy." But honestly, that can't possibly be the truth. If it's a great time for buyers, then it can't also be a great time for sellers. If today, property's are available at discounted prices due to a reeling economy and bloated inventory, then that means sellers are the ones doing the discounting. And of course the reverse is true: robust economy and/or low inventory would mean premium prices for available houses.
I'm often asked if this is a good time to buy or sell a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!
Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have fluctuated in the last six months, they are still near historic lows (below 5%, June 2011).
But here's the thing. Your monthly mortgage payment is a combination of paying down your principal and paying the interest owed. If you use a "wait-and-see" if home prices come down a little further strategy, but interest rates climb up, it could cost you even more to service a mortgage on an identical home!
While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.
Please give me a call (315-491-4963) if I can be of any assistance in determining how much home you can afford in today's market.