Is now a good time to enter the housing market, or should you wait? The Wall Street Journal recently tackled this perpetually-asked question by asking two experts with opposing views on the matter to weigh in.
Economist Eric Lascelles said “Yes.” Here are a few highlights from his argument:
- Buying is cheaper than renting in 98 out of 100 major metros (according to Trulia).
- Housing prices are down 34 percent from their 2006 peak.
- Investors ramped up their home buying by 64 percent in 2011, so it must be a good time to buy.
- We are seeing unprecedented low interest rates; even if home prices are still dropping, rates may be rising and you don’t want to miss out.
Financial Analyst A. Gary Shilling said “No.” Here are a few of his reasons:
- Five million future foreclosures are still “waiting in the wings” and will soon enter the market, pulling prices down even more.
- If those who are foreclosed on double up or move in with their parents, excess inventory will rise further.
- In December 2008, rates and prices seemed low and experts recommended buying, but prices have since fallen by 9.2 percent.
- According to Shilling, prices may still drop by about another 20 percent.
Experts can debate this topic all day long, but in the end an individual’s decision as to whether they will buy a home requires taking a number of variables into account (property taxes, down payment, interest rates) as well as their own financial situation, for the total cost of ownership. The decision for DC area residents is further complicated by the fact that the region continues to be both an expensive place to rent or buy a home.
This article originally published at http://dc.urbanturf.com/articles/blog/point_counterpoint_good_time_to_buy_your_first_home/5532
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