Wednesday, April 30, 2008

Will 2008 Be A Good Time To Buy Real Estate?

For me, the answer is "it depends." If I were previously considering buying real estate, e.g. a personal residence or a rental property, the answer for me would be "yes." If I wasn't in the market, the answer is "no."

Since we already own a home, don't need a vacation home, and am not financially able to consider investment property, our answer is "no." Just because something goes on sale doesn't mean I should buy it to save money:-) However, here are situations in which I would consider this year a great time to buy a home:
  1. Bargains: The sunny side of the real estate slump by Judi Hasson at MSN Real Estate shares some yes situations I would consider if I were in that situation:

  2. Renters - When mortgage, taxes and insurance are less then current rent. In the article, a renter reduced her monthly "rent" payment by $200 a month. This is a great deal if one can avoid moving for a few years.

  3. Craftsmen - If one has skills to rehab, can get a great price, and live in it while doing the work. Being able to do it oneself and live it in provides a good margin of safety.

  4. Investors - An experienced and successful real estate investor and have cash available. Having one's cost of goods decline is a great way to increase profits.

  5. Playing the Housing Slump - Time to Make Your Move? by Jonathan Clements in The Wall Street Journal offers another situation I would consider, i.e. helping one's children buy their first home.

  6. Finally, The Brighter Side of Housing by James R. Hagerty of The Wall Street Journal shares how people previously priced out of the housing market are now able to purchase homes that were previously "unaffordable."

While it's tempting, I am not looking at the housing crisis as an opportunity to become a real estate investor, landlord or vacation home owner. At this time, I don't have the experience, time, or available money to do any of the three.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial or real estate advice. Please consult a professional advisor.

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