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You’ve seen it before in so many words;….. ….and now for the ugly truth!……. I have always felt that the truth was my friend, as it knew where I stood with the real world. We sometimes do not like to tell the truth as we may be afraid that it might hurt someone, or hide something from some that would be to our disadvantage. These are forms of lies, which hurt us so much more over time. As a real estate professional, I must tell the truth, whch includes not only those things that may not work to my advantage, but also to not answer things that I do not know, which is a lot, I must say. This article is to tell the truth about the real estate market, which I do not think is ugly, although the wording sometimes does stop the bleeding, if only for a little while. TRUTH 1 – WE ARE IN ONE OF THE BEST MARKETS FOR BUYING REAL ESTATE. How can this be? With people losing their homes, taxes increasing, job losses that are real and may be worse? And you are telling me that this is a good time to buy? Yes, this is true. Interest rates are low (as low as they have been in decades). Rates on borrowed money are the major component of mortgage cost and this is something the Buyer can control now. Home prices are at decade low prices and well. When this is combined with low interest rates the case for buying versus renting is made. In many cases, the mortgage payment is higher than the rent it would cost to lease. TRUTH 2 – BUYING A HOME IS NOT AN INVESTMENT When you buy an investment, such a a CD or mutual fund, you expect a return on your money in the form of a dividend or interest. Buying a home to live in provides neither. In fact, there are additional costs incurred such as taxes, maintenance, utilities, repairs, and the like. No rent is received, in fact if you have a mortgage, you are paying more and more and while the interest is deductible, only to your marginal tax bracket. However, it is your place in the sun, where you can go to at the end of the workday and relax knowing it is yours; your own personal paradise away from the workaday world. There is a lot of value in that and that is the American Dream. However, purchasing real estate for investment; that is real estate in which you do not live, is an investment which right now is a potentially lucrative one. Rent will almost certainly be significant higher than the mortgage. Mortgage rates are low, as said above, and higher down payments make smaller loans. The maintenance and repair are tax deductible and the standard depreciation you can take on an investment property is also deducted each year, if you choose. So despite the fact that your home is not an investment is not a reason not to buy. If you have questions on this, I’m always available to discuss. TRUTH 3 – HOME PRICES MAY GO DOWN FURTHER This truth is more of a prediction than a truth, but indication are that it may not be far off the mark. The actual thing that the property buyer should think about is what that may mean down the road. If you are a homebuyer, you may want to consider the risk of buying a home if there is fear that you may have to sell within 10 years.

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