Often times when I’m out shopping for groceries or attending a community event, people ask the question “is now a good time to buy a home?” Before becoming a realtor I often posed the same question when I crossed paths with someone I knew who sold real estate. Many real estate agents would respond that it is always a good time to buy. Now in 2009 going in to 2010, I wonder would those real estate agents answer the same way.
A financial crisis later and deep into a recession, the true answer for today is “it depends.” It is incredibly true that real estate prices have reduced themselves dramatically and interest rates are at near all time lows, but the answer to the question depends on the person. Even if a person is relatively secure in their job- meaning that they are a top performer and their financials are sound, then I still answer “it depends.” A few of the questions that need to be answered are:
How long do you intend to own the home?
What area of town do you want to live in?
What kind of housing are you interested in owning? (i.e. single family home, townhome, or condo)
The answers to each one of these questions can mean the difference in a person’s financial viability moving into the future. Traditionally real estate values follow the economy. If the economy is up so are real estate values and if the economy is down so are real estate values. Long term home ownership has traditionally meant an increase in equity value and there is no indication that this will change for the future. So the longer a person owns the better the prospect is that they will see appreciation to accompany the tax breaks involved with home ownership.
The area of town a person wants to live in is huge factor in current value and future value. Some areas of the Atlanta market for instance, have not lost very much value even in this declining market. Other areas have decline dramatically. Most often the factors that help a neighborhood retain its value include: schools, crime rates, and per capita income of the area. In these areas it is common that homes will cost more per square foot so it may be necessary to accept a smaller house for the money. What is also true is that these areas appreciate well over time and hold their value even in down markets.
What kind of housing a person is most interested in also makes a big difference. Each type of housing has its own cycle. Condos for instance have been hardest hit in the Atlanta market, mostly because this type of housing is relatively new to the Atlanta market. Ten years ago, however, when there were relatively few condos and townhomes in the Atlanta metro area, these homes sold at a premium. In the hottest areas of town, these homes doubled in value in just 4 years.
In order to find out if now is the right time for you to buy a home in Metro Atlanta or any other market for that matter, consult with a real estate agent that will examine your personal situation before giving you an answer. If they aren’t asking you questions back, they may not have your best interest in mind.