Is it a good time to buy?

Is it a good time to buy?

I frequently get asked that question. I was asked the same question in 2006, 2007, 2008 as well. My answer has always remained the same…it depends. The question is more than a timing issue for most people. The fundamental question you need to answer first is “why do you want to buy now?” If you have a change in family size, change of employment, change in income, or if you are seeking a new neighborhood; then perhaps there has never been a better time to buy a new home. If you are merely “speculating” that today’s low prices mean a future equity bonanza then I would suggest investing in the stock market and staying where you are while you do some more research.

Homes are different than housing. Your home is more than an investment or wealth vehicle. It should be a stable environment from which you and your family can find refuge from the stresses of the outside world. A home is a sanctuary where you can live your life in pursuit of the “American Dream”…the home is not the “American Dream”. The freedom and pride of living in your own home is the dream. The home does not come furnished with good or bad “karma”…you bring yours with you when you move in.

I thought it might be helpful to look at this moment as an ideal time to do some research. If you are armed with the facts you can better determine whether it is a good time for YOU to buy. I have assembled some recent links from various sources. These links can help you sort out your goals, answer some questions and allay some of your fears.

At Lakewood Homes we want to help you buy your new home. We can help you gather the information you need…

>How to sell your current home in a challenging market
>How the new changes in mortgage lending will affect you
>How to improve your credit to take advantage of today’s phenomenal rates and prices
>What benefits are available to first time and re-entering home buyers
>How much home you can afford
>And more…

We can help you answer those questions. We look forward to assisting you as you answer the big question…

“Is it a good time to for you to buy?”

Check out these sites for some great info...

NY Times article on the new rules for homebuying (they look a lot like the old rules).

Homebuyer FAQ'S

How much home can you afford?

Monthly costs plus mortgage calculator

Monthly payment mortgage calculator

CNBC Spring Home buyer’s guide

CNBC's RealtyCheck Blog

Here is a snipet from CNBC this morning talking about the improving housing data...

Deal or No Deal?

Here is an interesting take on todays economy from Jay MacDonald at Yahoo finance. I thought you might benefit from this perspective.

Jay MacDonald asks: "Wait for Bargains on These Five Items?"

To read the article as posted, please visit Yahoo finance.

What's it going to be, America: deal or no deal?

With the economy in free-fall, consumers have been holding their breath -- and their cash -- as they delay major purchases while waiting for the economic turbulence to pass.

When buyers won't buy, sellers can't sell. When this happens, credit dries up, businesses shut down and joblessness grows, stalling the engine that drives our economy.

"We are going to see, over the next six months, a fundamental shift in the American retail landscape," says Paco Underhill, retail anthropologist and author of "Why We Buy: The Science of Shopping."

"Almost every major chain would be so much healthier if they shed underperforming properties. We are over-stored."

While the downturn is devastating for retailers, it offers several silver linings for shoppers -- fire sale prices, desperate retailers and historically low interest rates -- that have them wondering if they should hold off on purchases.

Should you buy today or wait for greater savings tomorrow? Or in the parlance of a popular TV game show, is it going to be "deal or no deal?"

Fast Changes

The question is not whether you'll get a better deal by waiting six months; it's also whether the retailer will still be around by then.

"We're in the worst consumer spending slump in decades, and there's a lot of debt by retailers," says Tom Kelly, director of the Center for Business and Economic Research at Baylor University in Waco, Texas.

"I think we'll see a lot of bankruptcy filings, and even difficulty getting enough capital to even reorganize under bankruptcy. If the economy continues to slow down and unemployment keeps going up, this will obviously injure consumer spending."

Right now, a buyer's market rages in almost every retail sector. Buyers gain clout when supply exceeds demand. How long this will last is anyone's guess.
Once your neighbors decide to spend instead of save, demand will rise, taking away some of your leverage.

But before you rush out and buy, remember that prices could just as easily drop next week. New features could be added, "bundled," to sweeten the deal. More attractive financing terms could appear at any time.

We surveyed some experts in a few big-ticket sectors for their advice on whether to buy now or hold out for even greater savings.

1. Airfares: Deal or No Deal?

No deal. Tom Parsons, publisher of the Bestfares.com travel site, hasn't seen this much airfare turbulence since post-9/11.

The one-two punch of skyrocketing fuel prices last summer followed by the crash of the economy last fall left the airline industry in a tailspin, much to the financial good fortune of air travelers.

Airlines initially cut routes in anticipation that higher fuel charges would put ticket prices beyond the reach of the lunch-toters. But once the economy tanked, all air travel, including business class, dropped off sharply.

"The airline industry right now is bargain basement," Parsons says. "I don't see the fares going up. If anything, you have a fair shot for the fare to come down."
Gazing ahead to the prime summer travel months, Parsons sees nothing but miles and miles of bargains, especially to or from hubs served by low-cost domestic carriers such as Southwest, JetBlue, AirTran, Virgin America, Frontier or Spirit. These will likely set the price points that legacy carriers like United and Delta/Northwest will be forced to match.

"If you're trying to buy for peak summer, July and August, and you're flying a route served by Southwest, I would suggest not buying yet," he says.

That said, Southwest is one of the few airlines that will refund 100 percent of your ticket price if the price drops -- good insurance in turbulent times.

The sky is the limit for bargains on international routes as well, says Parsons. Bestfares.com recently finished selling roundtrip flights from Dallas or Houston to London on British Airways for $449. The same flight on American Airlines costs $1,081.
If you're willing to consider other European gateways or seek out special introductory fares, the savings can be even greater.

"If you're going to Europe, I would just sit back and watch the prices. Especially summer; summer is just priced very high right now and I think the airlines are going to have to blink," says Parsons.

2. Vehicles: Deal or No Deal?

Deal. When the Big Three automakers have been reduced to punch lines for Letterman and Leno, there's little doubt that their products have become seriously shopworn. There's nothing like asking for a huge bailout to stop the flow of buyers onto your lot.

A team of auto analysts recently reported the average price of a new vehicle fell 2.3 percent in the second quarter of 2008, the largest single drop in the 41-year history of the survey. Analysts expect rock-bottom pricing to continue at least through the first half of this year.

"Automobile dealers are screaming," Kelly says. "They have inventories they can't get rid of and are scrambling with all sorts of efforts to sell them. I don't see that recovering anytime soon, at least through the first half of the year."
Need a new vehicle? You'll be able to drive a hard bargain, now or later.

3. Home Purchase: Deal or No Deal?

Deal. If you are contemplating buying a home, now may be the perfect time to make a purchase -- if you have the money and a secure job.
Real estate sales have sagged in many parts of the country as buyers have been frozen in the headlights of the economic downturn. As a result, prices are falling in many markets.

"If I could buy real estate right now, I would," says Amy Bonis, a certified mortgage planner with Alera Financial in Raleigh, N.C. "It's clearly a buyer's market. If you can buy a house that is undervalued, it's like, what shade of green do you want?"

In addition, mortgage rates have fallen near historic lows, substantially reducing the cost of financing for buyers with good credit.

Bonis says buyers who act now rather than wait are likely to see the best return.
"Somebody has to start buying, and when they do, there are going to be more buyers on the market, which is going to cause home prices to go up," she says. "When you stimulate home prices to go up, that affects the economy in a positive way, which raises interest rates. What people don't realize is, by the time they hear that things are better, (their opportunity) is already gone."

4. Mortgage Refinance: Deal or No Deal?

No deal (sort of). It may be a great time to buy a home, but it's no time to rush into a refinance on the hope of quickly capturing a great rate, Bonis says. Instead, it pays to take your time and do things right.
Bonis tells her refinance clients "absolutely do not lock" on a rate until they have their paperwork ready and approved.

Why? Bonis says the window to lock in an attractive mortgage rate has shrunk from four-plus hours to two in the past 12 months, due to the volatility in the bond market that feeds those rates.

"It's incredibly stressful because, when you go to lock a loan, the lock desks become frozen because there is so much volume; they actually stop accepting locks," she says. "I had a customer who wanted 4.5 percent. Well, I could have gotten him 4.6, but he said, 'No, Amy, I'm going to hold out.'
"Well, excellent -- now it's four and seven-eighths."

The best way to refinance today is to hurry up and get your paperwork prepared and approved, then wait.

"We get everything approved and then we wait for that two-hour window, and when that happens, we're going to lock in those people who have already gotten us all the papers," she says. "We don't charge them a dime until we get them the loan rate that makes sense to refinance on."

5. 'Netbook' Computers: Deal or No Deal?

No deal. In the world of mobile computing, there's a new kid in town: the "netbook," a pocketbook powerhouse with a miniature keypad and a 10-inch screen that's perfect for surfing the Web and catching up with e-mails on the fly.
Mika Kitagawa, principal analyst with Gartner, a technology research company, says netbooks have been eating into notebook sales since they hit store shelves last year.
"Yes, there is cannibalization," she says. "Netbooks are actually opening up a market for new customers who would like to have a smaller system to carry around."
Netbooks were a bright spot in an otherwise dismal holiday shopping season for computer makers.

Kitagawa says the netbook, which retails as low as $299, doubtless contributed to a significant decline in notebook prices during the third and fourth quarters of 2008, bringing low-end, 15-inch models down to between $399 and $599.

"Those low-priced systems put a lot of pressure on the price of regular notebooks, which have to somehow compete with the netbooks," she says.

Should you grab one now, on sale at $259 at several big-box stores?
Kitagawa says no.

"These could go down in price a little further, to the $199 range, depending on the functionality and operating system," she says.

By waiting a few months, you'll likely not only save a few bucks, but also may get a more robust machine.

"It really depends on how much vendors want to do to sell more of this product," she says.

Copyrighted, Bankrate.com. All rights reserved.

Great Time to Own Your First New Home

In its efforts to stimulate the economy and revive the housing market, Congress has enacted legislation providing a tax credit of up to $8,000 for first-time home buyers.

You might ask "Who qualifies?" Here is your answer.

What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

But time is of the essence for buyers who want to take advantage of this opportunity. Only homes purchased on or after January 1, 2009 and before December 1, 2009 are eligible.

Other facts you need to know:

The tax credit is for first-time home buyers only.

The tax credit does not have to be repaid.

The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.

Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

Visit the Federal Housing Tax Credit website for comprehensive information on this new bill!