Is it a good time to buy real estate?

You are going to get a lot of different answers. But, essentially-yes, it is. Am I a real estate broker? Yes, I am. And, if you were to ask any broker they would say “If I had the cash, I would buy”. But, before you plop down any money you better ask yourself a few things. First-what is the market like in the area I am considering. Did it appreciate exponentially over a short period of time and how much adjustment has been made to correct this? For example, the majority of Chicago’s downtown market did not spike like much of the country so there is not that enormous correction to be made. Depending on reports and the product, the prices are down 5-15% from this time last year. Essentially, prices are at 2004 levels.

Having myself been in real estate 20 years in Chicago and my clientele being largely first-time buyers, the market is prime for them. Rates are at their lowest and so are prices. Though, it’s not as easy at it seems. Many first-time buyers who would have easily qualified before with 5-10% down my now be seeing that they need a co-signer and/or 20% down. It’s imperative they get a pre-approval before even looking. Now, say they are qualified. Now it is time to think about what and where. I always tell my clients-think about what you do in your free time, what kind of work commute is acceptable and what’s your style. This narrows things down quickly. I tell my clients “It’s not what I like, it’s what you like”. I build a picture in my head to visualize what will work for them. I hear many people say “Oh! There’s so much out there!”. Well, there is inventory but only a small percentage really fits your criteria. If your agent is doing their job right, there really will only be 15 -20 properties. Again, it’s not what they like it is what you like and they should be developing that picture in their mind. Now comes the easy part. Seller’s are negotiable and prices are better than ever. Everything is at a 10-30%+ discount. Can’t beat that!

Now, let’s go back to “Is it a good time to buy”. Taking what I’ve just said and your own personal situation into account, you make the decision. Are you going to hold on to it for 3-5 years? Yes, 3-5 years. I have historically told my clients that and have historically been correct. 3 years to break even and 5 years to make money. Even in this market it holds true. Real estate is historically the best investment and hasn’t lost close to what the stock market has and still has all the tax benefits. No one. I repeat NO ONE has a crystal ball to know what exactly is going to happen, but historical data helps us make some educated decisions. That, along with a qualified and dedicated agent are the necessary tools for you to make the right decision.



Posted Dec. 1, 2008 by Debbie Maue