Have We Reached Bottom?

There has been much debate as to whether the housing market has finally hit bottom. According to USA Today, the homeownership rate is at 66%, down from 69% in 2004, as well as home prices down 3.7%, below 2010 levels.  Whenever we think we hit bottom, the market surprises us with new lows in home prices and higher delinquency rates among homeowners.  No one can predict when we will officially hit bottom. however from the looks of things, there is still room for home prices to fall.

Despite market woes, home prices have become attractive to buyers that were unable to afford a home during the boom years.  Through supply and demand, more buyers can enter the market and purchase homes, reducing inventory levels causing prices to gradually increase. But with record high employment and millions of homeowners underwater, it may take years before home prices starting rising nationally.

As a Real Estate agent, it’s difficult to put a smiley face on the current market. Certainly there are great buying opportunities considering home prices are just ripe for the picking.  Sadly, many buyers are unable to purchase a home because they simply can’t afford it.  Buying or selling a home is one of the most important financial decisions you will ever make. If you decide to buy, capital is the name of game.  Purchasing a home in cash or leaving a large enough down payment to pay off your mortgage in a few years can give you a huge financial advantage in a housing market that still has plenty of room before it hits bottom.

 

 

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~ by fnunez on February 14, 2012.

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