Friday, January 23, 2009

NY Times and SIREN See Eye To Eye


Photo by lumaxart on Flickr.

I knew when I first started SIREN I was on to something. There have been many sources lately that are validating my thoughts on the real estate market. If the NY Times and I can see eye to eye, there is no reason you shouldn't either. It's ironic, but the real estate market did a complete 180 and the demographic of people who are brave enough to buy a home are not your typical Wall Street professionals with high bonuses that suffered huge stock losses, but rather the average day person with a modest income. According to Jessica Armstead, a broker at the Corcoran Group, there has been recent influxes of buyers in New York looking for apartments and homes that were not seen in previous months. This makes sense when you take into account that a large number of those people are first-time home-buyers and have seen home prices decline faster than the rents they pay. With 30 year fixed mortgage rates around 5%, steep depreciation in home prices and the tax incentives available, why would you waste your money on rent when your mortgage payments may be comparable to your rental payments. The biggest uncertainty for buyers is whether prices will decrease further, but I think there are a number of other variables that people overlook, which I mentioned above. If you break it down, even if prices go down further and mortgage rates start to creep back up, your interest payments will offset the savings you make on a lower priced home. I believe your decision will be based on various life scenarios and I’m curious to see over the next few years the people who will prevail and come out on top. The NY Times article below has some great examples and stories of buyers that were brave enough to look past the uncertainty of the real estate market and feel comfortable in purchasing a home.

For the Brave, the Moment Is Now [NY Times]

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