Have you been thinking about buying a house lately? Are you wondering if now is the right time? Well, with rates as low as 3.25% (and maybe even lower in your area) for a 15 year loan, I’d say that’s a pretty clear indication that the time is right. Also, in using our own house as a gauge for the market, I have seen an upward shift in property values.
We bought our house in August last year, and thanks to a great site called “Zillow“, I can see that our purchase was timed perfectly! Take a look at the chart below:
As you can see, our house was once valued at about $125,000 in 2008, but then the market really started to tank. By January, 2010, the Zestimate was as low as $86,000, and then do you know what was introduced? The first time home-buyers tax credit!
When my wife and I first heard about this credit, we really started looking at properties, but after I pondered the market further, I noticed that home prices were beginning to go up, even though the economy was still slumping. This upward swing was most definitely a result of the potential $8,000 tax credit. Figuring that home prices would fall after the credit was over, my wife and I decided to save up our pennies and wait.
Sure enough, in early 2011 (when the tax credit was over), home prices started to take another dive. When we purchased our home in August, 2011, the market was at an all-time low for our property (Yay!! I love buying things at a discount). With this drop in value, we were able to purchase our house for about $78,000! Today, about 7 months after our initial purchase, the Zestimate on our house is up to $92,000! This means that our property value has increased by18% in the last 7 months!
Is Now The Right Time to Buy a House?
I’m obviously feeling pretty good about our purchase right now, but the real question is, what about those of you that are thinking about making a real estate purchase in the near future? Is it a good time. Will home values continue to rise, or will the economy take a turn for the worst, leaving home values lower than ever before?
Of course, I don’t have a crystal ball and can’t predict the future with 100% accuracy, but at this current moment, the economy seems to be in its recovery stage. The stock market is on the rise (the Dow has been above 13,000 for a couple of weeks now) and is a lot less volatile compared to what we saw last year. Also, jobless claims are decreasing steadily and are at the lowest numbers since early 2008. Things seem to be looking up and there are still plenty of deals on houses out there.
There is really only one trick to getting a good deal on a house. Homework and patience. Diamonds in the rough are often difficult to spot, but if you’ve done your research and know the value of homes in your local area, you’ll soon find a gem of a house for cheap. And, if you get it cheap enough, you won’t mind if the value goes down a little at first, because you’ll still be on top!
Did you recently buy a house? Have you noticed that your value has gone up since your purchase?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.