To buy or not to buy… That is the question. At least it is in our Santa Clarita Real Estate business. We field many calls a day from prospective home purchasers that are wanting answers to questions such as that one. Buying a home is a very personal decision – in fact, when you are contemplating buying the largest investment of your live – Step back and take a breath…
The question, “Is real estate a good investment?” is one which many have wondered over the course of our recession. In most situations the answer is yes, especially for the long term. Those buying real estate with the intent to live in a home or own a property for a long period of time are making an investment. Historically speaking real estate has displayed a return that outpaces inflation by at least one percent if not higher. In fact, regardless of the recent bursting of the housing bubble, many parts of the country have shown more than a 50% increase in property values since 1990. While huge jumps in home values are not expected to occur any time in the near future, the subtle rise in values in most home prices will make long-term real estate values grow at consistent levels.
Now could be a great time to buy a home for the following reasons:
- Mortgage rates are hovering above historic lows and have nowhere to go but up.
- Home values appear to be stabilizing and even increasing in some markets.
- Home affordability levels are at all time highs.
- Sellers are motivated.
There is no doubt that many people got caught up in the housing bubble, gambling on the huge returns that were occurring for real estate investors. Unfortunately those that bought at the height of the market, as well as those who bought beyond their means, gambled and lost. In today’s market buying a primary residence or rental property seems to make a lot more sense than it did at the height of the market, after all buying low and selling high is much better for your wallet than buying high and selling low.