Looking for information overload? Try attending the annual National Association of Real Estate Editor’s Conference in Texas, as I recently did. This event brings together real estate writers and editors to hear from economists, real estate industry insiders, and others, to get a picture of trends and interesting stories in the U.S. market.
By the end of last year’s conference, I’d heard the pundits opine that real estate sales (and therefore prices) were going to go up, down, down in a bad way forever, or just flatten out.
This year’s prognostications were a tad more consistent. In fact, there was a lot of talk about how now is a good time to buy. Here are some of the reasons:
- Home prices are starting to go up. This from Bob Dorsey, of the FNC Residential Price Index, an alternate index to the popular Case Shiller. Dorsey explains that the FNC index leaves out foreclosure sales – which he describes as attracting a completely different sector of homebuyers – revealing that in ordinary, arms-length sales, rises in price are already happening.
- According to Ted Jones, Chief Economist with Stewart Title, interest rates are poised to go up. And there’s no doubt that buying a home costs significantly more if you’re paying higher interest. Meanwhile, viewed over the long term, real estate remains a good investment.
- Sue Stewart, Senior Vice President of Mortgage Match, says, “Many more people are now considering buying their first home than in 2009. These first-timers are important because they’re not adding to the housing inventory when they turn around and sell.”
Still, commentators expressed concern about the number of foreclosures still making their way through the pipeline. One noted that, “According to Case Shiller, prices could still fall 15 to 25%.”
With all of that, I’ll give the last word to Sam Mitts, Executive Managing Director of USAA Real Estate Company. Mitts says: “We’re seeing a shift in thinking. A house is again being seen as a place to live in, not an investment.”
The takeaway message might be that if now feels like the right time for you to buy a home, go for it. If not, your window of opportunity, price-wise, may not close right away – at least not within the foreclosure market, if you’re willing to take the risks associated with buying a distressed property.