Is this a good time to buy a house or a rotten one? My belief is that the housing market is at an inflection point that I can’t call “the bottom,” but I can tell you this is a great time to look at buying a home. Even if in some markets there is some drift down in 2011, in many places we are past bumping the bottom and there are stirrings of value out there.
People tend to wait on the sidelines until it feels safe. I’m so against timing the market when it comes to stock investments, yet there are so many well-detailed metrics about real estate that some timing actually works in this case.
Right now, we are at a point when values are extraordinary. Having said that, there’s been a lot of naysaying over the last few weeks as President Obama has proposed that the government get out of the mortgage subsidy business.
I believe that’s actually a great idea for our country. It’s been lousy to have the government so heavily involved. With Fannie Mae and Freddie Mac having been nationalized, we as taxpayers are on the hook for untold hundreds of billions of dollars as a result, if not more.
Yet there’s been some concern that the loss of government involvement in the mortgage market will take one more prop away and that housing will never recovery. Baloney! It may make recovery slower, but it means the recovery will be real, not artificial, based on the free market. This is vital for long term U.S. economic health. (If the mortgage market becomes a free market, there will still be some exceptions for those who qualify for FHA loans, VA loans and rural housing programs administered by the Department of Agriculture.)
So sure, going from an artificial support to a real system always has unexpected short term consequences. But I will tell you housing is so affordable right now. One word of caution: You will still have to own for a substantial number of years for buying to make sense, even at today’s depressed prices.
My thing is I’m an eager buyer and reluctant seller. I buy to own for a long time or a lifetime. But be sure to buy at the right price!!