Of course there are many factors to consider when buying a house, Normally the bigest consideration for a buyer is can I afford the monthly payment. The current values and historically low interest rates have made it that a mortgage payment on a 30 year fixed with taxes and insurance is less then what most people pay on a decent rental. A basic calculation that you can use to determine how much of a house you can buy and still have a payment that is similar to your rent is ( Current rent / 70 x 1000 = how much of a house your can buy and for the same monthly payments) That calculation will give you a close estimate on what your payment will be on a 30 yr taxes and insurance principle and interest payment.
Right now interest rates are very favorable, homes prices are low, and the IRS and state of CA are giving you the opportunity to receive TWO tax credits if you qualify.
#1 - The federal government will give you up to an $8000 tax credit if you are a first time homebuyer(or if you have not owned any property in the last 3 years). However, you must occupy the property as your principle residence for 36 months. This means you cannot sell or rent the property for 3 years of the credit becomes due.
#2 - Since Merced has some new construction homes available starting @ $135,000, you may qualify for the new $10,000 credit from the state if you purchase a new, previously unoccupied home. Details are still coming out on this one but there is a lot of buzz and is currently in effect.
So if you qualify, you could have up to $18,000 in tax credits if you are a first time homebuyer purchasing a new construction home. Something to think about.
Prices, in my opinion, may go down some, but not at the rate or intensity of the past 2 years. However, if you purchase a home, I wouldn't count on being able to sell the home for a profit for the next 3-5 years. It will be a much slower rise.
If you have any questions, please let me know.
Adam Dalton, Realtor
Century 21 M&M and Associates
http://www.fhfa.gov/ ..... good place to watch mortgage rates and follow housing information.
Housing trends, median prices, sale summaries, crime, schools, look at neighborhoods/zipcodes, all information from county records......http://www.bhgrealestate.com/Views/Look/Default.aspx
To compare rental trends/rent price .......http://www.zilpy.com/ .............http://www.rentometer.com/
Good luck with your decision, Dunes
This is probably as good a time as any if you are looking for a lot of properties available, prices have already dropped a lot, and if you are in a sound financial position now you can negotiate your sale price quite well, and if you are working with a good area Realtor, he or she will negotiate a good purchase price for you.
Will prices go further down, they may somewhat, but as you get into that area then there will also be more competition as more buyers will decide that then will be the right time to buy, so you will have more competition.
When you are looking to live there for a few years and then rent, you must look at the property with different eyes, not just what you like, but also what would be easy to rent, I am assuming you are looking at a single fam. home, you will need someone or a company that will manage the rental for you in our absence! And the location and size will be very important, you want a rental to be close to transportation, may be areas where work is to be found (near hospitals and large companies, universities and such always someone will rent)
And the size has to be right - basically not to small and not too big....
make sure you do work with a good Real Estate Agent, to look at this purchase from all angles. If you are not currently committed to an agent let me know and I gladly connect you with one of my trusted Realtor/Colleague in your area just e-mail me directly to firstname.lastname@example.org
Take care and good luck to you!
Edith YourRealtor4LIfe! Working always in the very BEST interest of her clients...
and so do my trusted Realtor Colleagues.....
Yes it is absolutely a good time to buy. First step get pre approved. I have some good recommendations if you are intersted. Second, find a good agent to help you find the right house.
Also there is now an 8,000 dollar tax credit available that you do not have to pay back. A great extra incentive to buy. Please let me know if you have anymore questions.