Monday, October 31, 2011

Should you buy a house now that is the question?

In my opinion if you are a young person, say 50 or under, now is a great time to buy a house!

Let's start with the negatives.

·         Housing prices are going down.
·         I'm afraid they might go down further.
·         The news for the last five years has been negative.
·         If the price goes down I might lose my money.

Let's look at reality!

·         Housing prices are going down. Housing prices have traditionally increased at a fairly significant pace higher than inflation. That is when you consider people that have bought at the peak as well as in the valleys. We are currently in or near the pricing bottom and although there may be a slight decrease in value from this time going forward, in reality the price of homes will begin to go up. What happens when they go up? Because of a strange animal called leverage, the price increase in housing is magnified to the homeowner. What does this mean? It is very simple, if you put 10% down on the price of a home and your home increases by 1% in the next year the increase on your investment, which remember is 10%, is actually a 10% increase. Should the increase be 5% you will actually have had a 50% increase in your investment!

·         I'm afraid they might go down farther. In some markets this may be true, however in our market there is very little chance this will happen. We are the capital of the United States! If you look at capital cities around the world we are grossly underpriced! As our population increases our need for government also increases. If there is one housing market in the United States that is secure is ours!

·         The news for the last five years has been negative. If you would like to wait and purchase when the prices are at their peak then this is not your time to buy. If you would like to take advantage of a down market you'll never see a better one!

·         If the price goes down I might lose my money. NO RISK - NO GAIN - NO PAIN! The reality of today's real estate market in the Washington area and especially in Loudoun County has very little downside. Every economic choice you make involves a risk and this market has very little of that.

Congratulations on your next purchase! 

Sunday, October 30, 2011

Sales continue to decline in Loudoun!

The chart below shows the number of sales each month comparing the past 12 months to the year earlier. We are continuing to see less activity in the local market.

Thursday, October 27, 2011