Excerpted from Strictly Business Magazine:
With all the talk about the economy these days, it’s easy to start assuming it’s only prudent to hunker down and ride out the storm, spending as little money as possible and making as few changes as possible. Many people have this knee-jerk reaction even if the supposed ‘bad economy’ isn’t affecting them personally. Even if their business is doing well, they have plenty of money in the bank and there is no trouble on the horizon, they assume things will get bad soon and so they alter their lifestyles. Unfortunately, this has been the case when it comes to the housing market. It seems that every time you turn on the television, you hear something about how bad the market is. This causes a general feeling of fear and people naturally start assuming they should not even consider buying or selling a home in this market. They often don’t even do any research or talk to professionals who can answer questions about the local market, they simply assume.
The truth is, the local housing market in Lincoln is not nearly as bad as the news would have you believe. In fact, it can be a very good market if you are in a position to buy. Consider the following information from the REALTORS Association of Lincoln:
What’s the NATIONAL weather for today?
Suppose you turned on the Weather Channel and were given only a national forecast for the day? You might find yourself dressing for Arizona instead of Nebraska!
Over the past year there has been some dreary news about the nation’s real estate market; yet, no single real estate market exists. Real estate is a local phenomenon, just like the weather.
Headlines indicate stormy weather.
Routinely we see cloudy headlines such as “Home Prices Falling” or “Foreclosures Rising.” Those headlines often have little to do with the Lincoln market. Look at these facts about the Lincoln real estate market:
1. Low foreclosure rate. Out of 50 states, Nebraska’s foreclosure rate ranks 49, according to a recent RealtyTrac report.
2. Falling interest rates. Home mortgage rates are at 50-year lows. Today you’ll find mortgages in the 5 percent range; down from 6.5 percent last year.
3. Affordable, stable prices. The median sale price of an existing single-family home in Lincoln is $126,200; $198,775 for new homes. These prices have been historically stable and are extremely affordable when compared to the rest of the nation. Current median sales prices for existing and new homes are respectively 5.2 percent and 18.3 percent higher than they were five years ago.
4. Great selection. There are currently 2,400 single-family residential homes for sale in Lincoln. This number is historically high and provides home buyers with a wide variety of opportunities in the local marketplace.
5. Local economy. Many local markets experience the ups and downs of industrial production and factory layoffs, but not Lincoln. The local economy boasts a low unemployment rate and good job growth.
The local weather. Home values in Miami, Las Vegas, or Phoenix have little to do with Lincoln. These higher-cost, warm-weather cities experienced white-hot growth and rapid price increases over the past decade. On the other hand, Lincoln has enjoyed a much slower, but steady growth pattern since the mid 1980s. Lincoln lacks the boom-bust cycle of rapid-growth markets.
For Lincoln’s future, it’s nearly certain that you can expect higher home prices. The local outlook is positive; you might even say Lincoln’s forecast is sunny.
Thank you to REALTORS Association of Lincoln for writing this portion of the article.
What does the above information mean for you? It means that now is not the time to be afraid, it’s the time to take advantage of our local stable market and jump on some of the great deals that are to be had. Here are a few ways to do it.
Work with a Realtor
One temptation in a market such as this where there is an abundance of supply is to think you are better off finding a home on your own. After all, with so many choices out there, how could you not just check the paper, cruise the open houses and find the home of your dreams at a great price? The truth is, there is absolutely no reason NOT to work with a realtor (in this market or ANY market for that matter). Realtors simply know the market better because that is their job. They know what houses are available that would work for your needs.
John Roberts of Woods Bros Realty states, “We can do all the legwork, lining up private showings for you for homes that fit your criteria. And because the commission is paid for by the seller, you have nothing to lose working with a realtor to buy a home.”
Take Advantage of the Available Tax Credit
Now is the perfect time for first time home buyers, not only because of the selection available and possible deals, but also because of the available tax credit. If a first-time home buyer purchases a home before November 30, 2009, they can take advantage of the Federal Tax Credit of up to $8,000. For more information on this opportunity, contact a Realtor who can tell you more about your options.
Don’t Worry if you Have a Home to Sell
Those who are looking to buy but who also need to sell their current home may think this is not the right market for them. However, this is simply not the case.
“The average sales price of an existing home closed year-to-date is approximately the same as it was last year,” John Roberts notes. It’s true that some people are taking less for their homes than what they hoped to sell for. However, if you are also looking to buy, you’ll likely be able to get a good deal on your upgrade. So even if you sell your current home for a bit less, you’ll be able to recoup that loss in what you save on your new home.
Take Advantage of the Rates
Mortgage rates are at historical lows, making this a perfect time to buy for those who will be securing a fixed mortgage. If you speak with a mortgage professional, they will be able to show you in writing how much money you will be saving over the long term if you lock in the current low rates. This could amount to thousands of dollars over the next 15-30 years. Combine this with the value prices of many local homes and you have an excellent opportunity to get into the home of your dreams for a monthly payment you can afford.
John Roberts closes by saying, “Lincoln has a historically strong housing market with a steady and stable growth in property values. Because we didn’t have the oversurge in prices that coastal markets had, we haven’t experienced as much of a price correction. Owning a home in Lincoln is and always has been an excellent long-term investment.”
The bottom line is this: if you are looking for a home to live in or for a solid long-term investment (or both), this is your time. By working with a local realtor, taking advantage of the low rates and keeping an eye on all the good deals available, you’ll be able to take advantage of the ‘sunny weather’ in Lincoln and make a great buying decision.