As Realtors®, we all want consumers to start buying real estate again. With the market as unstable as it seems now and the mortgage industry staggering from the severity of its own demise, many people are hesitant to spend money on any investments and are busy looking for ways to save their portfolios. Buying real estate is the last thing people are thinking about. However, now is really the time to buy real estate. Why, you ask? Well, here are a few reasons...
- Interest rates are still at an all time low. The market downswing of the 90's in Hawaii saw interest rates in the high 7's and up, depending on the size of the loans. Loans today can still be acquired starting in the mid 5's and up on 30 year fixed loans -- if your credit rating is high. This is a major savings.
- Waiting for the prices to bottom out is a losing quest...bottomed out prices are only apparent AFTER the prices start to go up again.
- Once the prices do hit the bottom, the interest rates may be higher, so it could, essentially, cost you more money to get that loan for that low-priced home.
- No matter what the market, real estate is always a good investment. Real estate values, like gold and silver, are cyclical. It will always go back up. Admittedly, the hardest bite to swallow is when you've bought when prices have topped out (again, hind sight is 20/20).
- Buying real estate -- especially for cash buyers -- helps get the inventory moving again and allows for values to start drifting upward.
As difficult as it may seem to swallow in the current market, real estate is the best investment you can make, especially when there are so many deals to be had right now. Prices are coming down. Unfortunately, short sales and foreclosures are becoming more prevalent as well -- even here in Hawaii. So there are always opportunities to buy at lower prices than a couple of years ago.
The bottom line is: The longer you wait to buy that piece of property you've always wanted, the harder it may be to get a loan, and the interest rates may bite you along the way. So, either spend the money now and get a great deal that will likely appreciate over the coming years while the cost of the money you borrow is still low, or miss the boat...
