Believe it or not, 8 in 10 Americans believe that purchasing a home is still a good idea, even in the face of the economic challenges facing the housing market. According to the 2010 National Housing Pulse Survey, which is a report sent out by the National Association of Realtors. The survey takes a look at how finding housing affects people. Nearly 80% of respondents reported that job layoffs and unemployment are huge concerns that they feel is barring them from homeownership.
Foreclosures and REOs are locked down, and banks often won’t lend to individuals such as this. Regardless, 68% of those polled believes that his is a great time to purchase a home. In 2008, only 66% believed this to be true. People recognize that low home prices and mortgage rates make a steal, and nearly one-fourth of people who are renting said they would consider buying a home now.
As investors, these lower home prices has changed the perception of our inventory favorably. Yet, only 2 in 10 renters responding felt they had a large enough down payment to cover the down payment and closing costs. Would’t a lease option be an ideal situation here? By providing a “homeowner in training” an option would provide them with a timeframe to build up this important cash reserve.
Another obstacle facing would-be homeowners is a lack of confidence that they would be approved for a loan. The beauty of being an investor is that we can be our own banks and create our own loan standards…we offer options to people who have few choices.
The market is ripe with opportunity for those who know how to capitalize on these changing trends. Have you learned how to take advantage of these ideas yet? Anyone can do this, you simply have to have the right education. There are still a handful of seats remaining for the REI Rainmaker Retreat, where Steve Zehala, Eddie Speed, Walter Wofford, and myself will be showing you how to cash in, right here in this market. The theme for the event is “Alternative Financing: Finding What Works Today”, and we’ll cover sandwich options, creative financing, notes, seller financing, lease options, wrap mortgages, and more. All the tools you need to prepare yourself for the alternative financing boom will be at your fingertips.
I like to reward action-takers. And by making it to the end of the article, I know you’re someone who cares about their education. Tickets for the event are selling for $297, and I’d like to extend you a $100 discount to encourage you on your path to knowledge. Visit http://www.reirainmaker.com and add a ticket to the shopping cart. Enter this code to get your $100 discount: RRFB197.
Don’t delay! As of this morning, two seats remained. TWO. The size of our room is limiting how many students we can accept, so act now.
Well, I believe home ownership is a good idea IF it is as it has been historically in terms of price “appreciation.” What I mean by this is that, historically, the price of homes have gone up about the rate of inflation and in line with peoples’ average wages. It wasn’t until artificially low rates put on by the Federal Reserve and easy credit and lending policies (i.e. just make sure the person is breathing and we’ll give him/her a home loan even if they can’t afford it) that we ended up with such a historic bubble in real estate and ridiculously high and unrealistic prices on homes. In this sort of environment, in many case, it’s not worth it to own a home and have a mortgage b/c you’ll end up “upside down” on your mortgage (you’ll owe a lot more than the home is worth on the market in terms of what the market REALLY demands – not what you think it’s worth or the government thinks it is worth). So, for the most part, it would’ve been wiser to rent b/w 2002 to now. I think real estate prices will go down even further -maybe another 30% depending on which area of the country you live in. Ultimately, real estate prices must go down to pre-bubble prices, especially with record high unemployment etc….
Isn’t this preoccupation about owning your own home a concept driven by banks… makes fortunes for them.
At a time like now the returns on domestic property are so low why would you consider them as an “investment”?
Won’t home prices will get to normal levels when people buy them on normal terms – reasonable deposit/20 year bond/fixed interest rate? All the fancy financing options created by banks (together with buyer stupidity!)have completely distorted this market.
Home ownership, for the owner occupant, is one of the few mechanisms for the average person to amass a tax free asset of significant value that offers tax benefits while you own it. This is a long term strategy unlike the buy it today and sell it next week for a $20K profit. The current financial mess has many fathers ranging from the banks, brokers, servicers, to the government, to speculators and even the man on the street who thought values would rise in a straight line forever. A lot of people let greed get ahead of their intellect, now we are all paying the price.
Home values will return to normal levels (whatever that may be) when supply, demand, employment and credit fall back into balance. The formerly hot markets remain asea in inventory while those less volatile markets where the appreciation is more in tune with inflation, employment and job growth will regain momentum first. The key now is to buy right. Either price or terms make for good deals not speculation and blind faith.
To your success…
Augie
thanks for your post!!
I wonder what the statistics are in our country regarding homeownership. Personally, I’m with the 8 Americans in saying it’s a good idea. Though, I cannot ignore the economic hindrances as well, I still believe it’s a smarter choice to invest in buying a home than just renting one.