Economists Suggest Buying Real Estate Now
With the combination of low interest rates and low housing prices, now could one of the best times to invest in real estate according to Austin real estate companies such as HomeCity.
The CNN article, “Real estate: It’s time to buy again,” caused quite a stir in cyberspace, both from supporters and dissenters alike. One cyber-pursuer cackles: “Ha! What a joke.” While some see optimistic predictions of the real estate market as delusion-driven or, at the very least, misguided, such predictions are now gaining more and more support from economists. CEO Charles Plosser informs us that “Consumer spending continues to expand at a reasonably robust pace, and business investment, particularly on equipment and software, continues to support overall growth.” In consequence, “the nonresidential real estate sector is likely to improve as the overall economy gains ground.” The projection of economic growth allows us to rest assured that the housing market will too strengthen with time.
So, real estate will improve, but why should you buy now? Any real estate mogul will suggest trying to buy at the bottom of the market and, indeed, ladies and gentlemen, we are pretty darn close to the bottom. A study by Deutsche Bank shows that homeowners now pay just 9.8% of their income in after-tax mortgage, tax, and insurance payments, down from 17.2% at the market’s peak in 2007. Additionally, with such low prices, home-buying has become incredibly affordable. Phil DeMuth, co-author of the hot-of-the-press Little Book of Alternative Investments, encourages his readers to buy by explaining that “Housing prices are where they were in 2002 and you’ve got mortgage rates at 5% now on a 30-year mortgage.” If you can qualify for a good mortgage, DeMuth says, “I’d say this is an excellent time to take that kind of position.” After a stint of pro-renting advocacy and a healthy dose of pessimism, it seems that we have come full circle back to our culturally-rooted obsession with houses.
James Kim writes for Austin Real Estate service Homecity.com. HomeCity combines powerful online Austin MLS search technology and other online tools with personalized real estate services to provide clients with the knowledge they need to make the right buying and selling decisions.
