|
Page 2 of 2
If you’re in the market to buy a new house today, you’re buying it for price tag that was last available in 2003 – and that’s not even adjusting for inflation. In some places, the prices available will take you all the way back to the nineties. If you take the government’s bogus inflation numbers, which are understated, you’re looking at another 20% discount. Add to those factors, low interest rates hovering around five percent, the two homebuyers tax credits and the fact that you can shop till you drop to find just the right house without worrying about a counter offer disturbing your cheap house hunt. It's finally an incredible buyer's market and all the buyers are sitting on the fences. Illogical? Quite the contrary, most buyers assume, perhaps correctly, that they will be able to get the same house for less next year.
However, if there is one factor that most consumers are not taking into consideration – it has to be future projections of inflation. In assessing this factor, start by asking yourself whether we have a government committed to fighting inflation. Whatever you do, don’t read Washington’s lips because you might miss out on the diabolical plot beating in their lying hearts. In my estimate, the decision to let inflation rip has already been made but don’t count on it to be made public. The government, any government, will always claim that they are fighting inflationary forces. Regardless of what they claim, the federal government has every incentive to unleash inflationary forces to weasel out of their $13 trillion dollar debt obligations. Few things in life are as satisfying as paying long term debts with deflated currency.
This diversion about inflation is necessary to take up because of the topic at hand. Borrowing cheap money in inflationary times is about the smartest thing you can do and a loan secured by real estate is one of the few ways the average Joe can load up on fixed low rate long term loans. Grab a $200,000 mortgage at 4.5% and you'll be laughing in ten years after a decade of double digit inflation makes that more like $70,000. Of course, we always have the specter of deflation but I think our government will do everything to avoid that.
So is it a "Great Time to Buy?" Sure, if you have a steady job, twenty percent for a down payment, and are ready to turn the screws on some unlucky seller that missed unloading their property at the peak. As always, I suggest that you buy the house you need – a nice reasonable sized pad to give you shelter from the storm in a neighborhood you want to live in for a very long time.
More Articles on Buying Real Estate:
Want to Learn How to Live Better and Cheaper?
Get our Famous 5 Rules of Living Cheaply today! You'll get over 20 pages of great content for free with full access to our Cheap University.
|
