Top 5 Reasons to Buy this Summer

TipTuesday is a new weekly column we’re starting at ErionHouston.com to bring you some easy to digest, common sense real estate tips you could put to work right away.

With the constant barrage of conflicting news you get in the media every single day, it can get difficult to know when is just the right time to buy a home in Houston. The factors that affect that decision like interest rates, housing market conditions and overall economy seem to change daily and that doesn’t make things any easier. As true as that may be, there are 5 top reasons that make this summer the perfect time to purchase:

1. Low Interest Rates trending higher

Interest Rates are at a 30+ Year low (you’ve heard that ad nauseaum). But could they go even lower? To answer that, you have to understand what’s causing rates to be this low in the first place. The Federal Reserve has cut the FED Funds rate to (near) zero since last November. Not to mention the purchase of $1.2 trillion in mortgage backed securities by the end of 2009 to force rates lower. Translation: Rates are not getting any lower – if anything they’re likely to go up so now would be the time to lock in a good fixed rate.

2. Tax Credit Love (up in November)

First time homebuyers can take advantage of an $8,000 tax credit if they close before November 30th, 2009. Scores of procrastinators will rush to complete their purchase before that deadline so competition is bound to be higher the closer we get to the deadline. This tax credit is fully refundable which means it is not limited to the tax owed and does not need to be repaid. In our market where the median sales price is pretty close to $150,000, this credit  amounts to a 6% additional price discount – not too shabby.

3. Foreclosure Deals Abound

Foreclosure deals are definitely out there for the buyer that willing to see past the cosmetic issues and into the real potential of the property. When done correctly, you could purchase a home below market value with significant built in equity – sometimes as much as 20-25%. However, a note of caution: All foreclosures are not deals – only a small percentage of foreclosure homes are true bargains. While the quantity of bank owned foreclosures is not expected to go down in the near term, they have been trending downward and accounting for a lesser portion of total real estate sales in Houston. Competition will be higher for low priced foreclosures the closer we get to November which will lead to banks being unwilling to negotiate prices.

4. Healthy Houston Housing

As we discussed in our latest Houston Real Estate market report, all indicators are pointing to our market turning the corner in the second half of 2009. Inventories are healthy, prices are stable and foreclosures are less of a factor. Our crystal ball is as cracked as anyone else’s, but the general consensus recently has been that  we’re at or near a bottom. If that’s true, buying now is the absolute best time to do so – prices  are as low as they will get.

5. Solid Local Economy

If the housing market was a home, the local economy would be its foundation. Houston specifically (and Texas in general) has one of the top U.S economies with lower than average unemployment. As a matter of fact, professionals from harder hit areas of the country are moving to Texas to take advantage of the job availability and helping local home sales in the process. Plus, oil in the $70/barrel range does not hurt either.

So there you have it. Buy a Houston Home this summer because interest rates are not getting any lower, Uncle Sam won’t stay generous (with our money) forever, banks might just stop allowing “stealing of foreclosures”. housing market is doing better than most supported by a rather strong local economy.

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