The Lion's Den

I know it has been a while since I posted on the site, but it has been a hectic time in my personal life. However, I am definitely going to make a more pronounced effort to keep my viewers more informed about my random insights of real estate (now that may not be worth much, but I gotta keep my audience entertained!).

Normally, I am more grim about the market, but I have been a helping a few new home buyers find homes which has me seeing a really positive trend in this mark that for them it is a good market. As investors and speculators continue to be shut out of the market (except for those who are in solid cash position or ready lines of credit), this market really could be a solid market for newbies.

Everyone has heard about the tax credit, but it is worth mentioning again. If you are a first time homebuyer, you can get a $8,000 tax credit if you close before November 30th. This would be a nice chunk of change to get on your tax returns. Couple these incentives with a article that I read in the Chronicle from Nancy Sarnoff at (www.Chron.com) that 1 out of 4 sellers in the United States have slashed prices. This means that prices are either decreasing or stabilizing right now, and this could be a nice entry point for homebuyers. These are two particularly strong force that are converging together at this time.

Now, my wife and I are refinancing our home, and I can see the final part of this perfect storm- interest rates. Rates are low for first time home buyers and primary home mortgages (investors- not such a good time), as rates are around 5% in many banks. This means if you can afford a payment that you will enjoy great payment terms. I do strongly urge that people make sure that they understand their payment terms on any loan. You should consider 15 year, 20 year, 30 year mortgages that are fixed as most people are easily able to understand what they are getting into. Now, I know that there are investors or savy investors who can take advantage of Adjustable Rate Mortgages, etc; but I am not one of those people. I stick to easy to understand programs to avoid issues later on that I will regret.

Now, lets review: 1st Tax Credit for First time homebuyers, 2nd Prices are falling, 3rd Low interest rates. Maybe, there can be a silver lining through this real estate downturn for some people. As they say after a storm, there is always a rainbow. The end of this rainbow is not a pot of gold, but a 2000 square foot home with 3 bedroom and 2 baths for lucky people.

(Jay Raman is a real estate investor and he is the owner of a full service real estate firm, Ashoka Lion www.AshokaLion.com. You can send emails to him through the “Contact Us” portion of the site)

This entry was posted on Monday, October 12th, 2009 at 5:20 pm and is filed under Buying Property, Economy, Houston Real Estate, Real Estate General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.