Thursday, January 8, 2009
2009 Brings New Hope!
While no one can predict the future, as President Obama sets up new legislation to turn around the economy, there is a new attitude emerging. One of hope.
Many attribute the recession to cycles and some see it as a self fulfilling prophecy. A year ago when the experts predicted a bad year, we all tightened our belts and trimmed the fat from our budgets. When you multiply this by the millions, you naturally have a recession.
But now a different climate is developing. Many see the Bailout money coming. We are ready to recover. “The economy, including the real estate market, may have finally arrived at, or is just before or just past the bottom,” according to Gary London in the San Diego Business Journal.
The recession has brought hope to many renters. The Housing prices have now rolled back to an affordable level, where renting costs as much as to own.
While First Time Home Buyers must have more money to put down than two years ago, there are still great benefits to buying a home. You have to have a place to live and in the long run, home prices continue to climb. Even with the recession, home prices are still triple what they were twenty years ago. Why pay someone else’s mortgage? The average home owner saves approximately $8000 a year in taxes. Not to mention the $7500 tax First-Time Home Buyer Credit incentive if you buy before July1st 2009. See http://www.federalhousingtaxcredit.com/ for more detail.
When I look back at when I was in my mid-twenties, at that time you couldn’t buy a house without having 20 percent down and the interest rates were in the teens. Unlike today when you can get into a home with as little as 3% down and the interest rates still continue to be in the 5 and 6’s.
While price reductions may continue during 2009, until the majority of foreclosures and short sales have been bought up, I agree with London “While it is very unlikely to be a banner year, 2009 will be a new beginning." Looking forward to a Better New Year.