A Fannie Mae survey released last Tuesday found that 64 percent of Americans surveyed believe that housing prices will be the same or higher over the next year. As such, they think that the right time to buy a house is now.
It should be noted that in a similar survey back in 2003, when the market was racing higher, 66 percent of people felt the same way. If anyone subscribes to the theory of the wisdom of the crowds, then it is likely that we will see increasing prices over the next year. To be more accurate, in the D.C. metro area we have already seen prices increase at a reasonable rate.
The majority of the people polled believe they will have a harder time getting a loan than buyers of 5 or 10 years ago. I agree with that and I see it happening, however I also feel that lenders are slowly becoming more reasonable and flexible with their loan offerings. Over the next two years I am hoping that things will be more balanced.
One thing to keep in mind is that this survey, as well as most such surveys, are conducted at a national level. I won’t go on the record saying that the D.C. area is immune, but the D.C. metro sub-markets have been more stable and performed much better than the national average
Keeping in mind that this downturn is considered the worst since the 1930s, we are lucky that the market has started recovering. And I am particularly happy that it is doing so at a slow pace, as I believe that will create a more stable market for the long term.
In the meantime, even with the tax-credit expiring, this still is a great time to buy a home, whether you are a first time home buyer or a repeat buyer. Interest rates are low and prices are low. One word of caution: we have gotten used to low interest rates over the past 5-10 years and we don’t realize that such low rates are not normal. I doubt we’ll ever go back to 10%+ rates, but 6%-8% are to be expected eventually.
So if you are thinking about buying, why not make the move in 2010? Contact me to schedule an informal meeting and see how I can help.
