I’ve encountered the question and concern frequently, what will the market do? Well, honest answer is I don’t know. We’ve only got history to go off of and that isn’t exactly lining up with our current industries thoughts and experiences. Due to our current economic pressures, people have also been emotional, stressed and insecure about our financial future. Can we really measure the next few years real estate values with what we see today?
Why would I take the risk at the moment in our uncertain times and go out on a limb and buy more real estate? Well, historically it has always performed well. Slow and steady is usually the pace, but it has always came back and some years has really jumped ahead. How many times have you heard the story, “I bought this 40 years ago for $2,000.” I’ve heard this phrase with different numbers many times over . I’ve rarely encountered the owner being unhappy due to that certain piece of real estate’s current value after owning it for a number of years.
So if you’re unsure of whether or not to invest your cash on hand into real estate, I would think twice before abandoning the idea, it could prove to be profitable and secure use of your time and money. With proper market research, I can help you invest in investment properties and profit from them.
I’ve encountered the question recently, what will values do after the tax credit ends? Fact of the matter is, I don’t know. I don’t believe this tax credit has really done that much to begin with. Will it make or break values after it ends, time will tell. I think they’re many buyers who have the cash and are willing to gamble that values will drop.
I can’t say what I would do if I was looking for my first home at the moment. On one hand values could drop which could increase your buying power, on the other it may not make any difference and you’ll miss out on $8,000 credit. For example, based on a $100,000 home, for values to drop 8% or more, even at the worst time in our local economy I don’t think values dropped that much, in the under $150,000 range. Your closing costs would be about the same regardless, you may end up saving a thousand at most on overall cost.
Based on normal appreciation we’ve experienced in Lancaster County, you can count on about 3-5% over 5-10 years. So do the math, is it worth taking that cash out of pocket, or not getting the tax credit.
