There isn’t a day that goes by that we don’t hear a news report about another mortgage company in crisis or read a story about another family facing foreclosure. Folks we have heard this all before in one form or another.
“The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline.” (Time, December 1, 1947)
“The median price of a home today is approaching $50,000 . . . Housing experts predict that in the future price rises won’t be that great.” (Nations Business, June 1977)
“The era of easy profits in real estate may be drawing to a close.” (Money, January 1981)
“Financial planners agree that houses will continue to be a poor investment.” (Kiplinger’s Personal Financial Magazine, November 1993)
I would like present another perspective for buyers to consider. Lenders have always been in the business to lend money. They will qualify you for a loan based on the information you provide and don’t really care if you can actually make the payment. Surprised? You shouldn’t be. Most lenders sell loans shortly after they are closed. So in some cases the original processor who took your information only cared about getting the loan closed so they could get paid.
It is your decision as the buyer to determine how much of a house payment you are comfortable making. You know your lifestyle, the lender doesn’t, so don’t get sucked in to a payment that you aren’t comfortable with. Just because someone tells you that you can afford a $750,000 house doesn’t mean you should buy one. Look carefully at not only the house payment but all of the other expenses that come with owning a home and then find a home that makes sense.
If you are in a position to buy, don’t sit back and wait for some mysterious “bottom.” There are bargains throughout the Northern Virginia area. Take your time and work with a Realtor® who knows how to negotiate and who understands your real price point. The real message in this market is even when times appear bad the fundamentals of owning real estate have not changed. Having your own home is a good investment and a smart buyer never loses sight of the benefits of homeownership no matter what the latest headlines say.