To Buy Or Not To Buy

There is so much information in the media regarding home ownership, what is correct!

• Buy a home now -- you'll get a great deal!
• Don't buy now -- house prices are dropping, you'll do better later

Bombarded with all of the contradictory opinions and data regarding the housing market, what's really going on? Those who may have thought they "missed the boat" are finding the boat has not left the dock yet; but there are always two sides to every story. According to an article from the Chicago Tribune in Sunday's newspaper, this is some information I found on this topic:

5 Reasons to Buy Now

1. There's a vast selection. Although home prices have dropped since 2008 there are still nearly 85,000 houses, condos and town homes listed in early May.
2. Homes are on sale. Illinois has climbed to 10th place among states with the highest home-price declines. The median price in Chicago is $194,000 down 22% from the year before; in September 2005 the median was $270,000.
3. We may be near the bottom of the market decline. You have to ask yourself, "can you rent for the same amount and have the same quality of life over a period of years."
4. Uncle Sam is feeling generous. First-time home buyers (or those who haven't owned a home for at least three years) and close by December 1st are eligible for a tax credit.
5. Mortgage interest is on sale too. Fixed-rate loans are holding steady at about 5%.

5 Reasons to Wait

1. We're not at bottom yet, and prices will fall further. Illinois placed fifth in the nation among states with the highest filings in the first quarter of 2009.
2. You need to stay in the house a number of years. The days of a "quick sale" are mostly gone so be ready to stick around in order out on top financially.
3. It's hard to keep up with a mortgage when you're unemployed. Illinois' unemployment hit 9.1% in March (highest in about 24 years).
4. Renting isn't a crime. Landlords are bending over backyards to have a renter with income.
5. Financing is more complicated than it used to be. Standards are considerably tighter than before requiring higher credit scores and larger down payments.

Improvements That Won't Break the Budget

The last three years that has been a craze to remodel your home, spend thousands of dollars in kitchens and bathrooms and you will get that money back tenfold. Now we are seeing the days of "If my house is just worth what I paid for it, I would be happy". We are now asking ourselves, how much (if anything) should we spend on improving my space for the long-term so that I don't overimprove and overspend?

I ran across an article in my February 2009 Realtor Magazine and they offered the following suggestions:

1. Kitchens and bathrooms still make the biggest impression on buyers
2. Stainless steel appliances are still essential today in almost every home price point
3. Some things you can do that won't break the budget but add value are tiling a backsplash, painting kitchen cabinets instead of replacing, change the hardware, add undercounter lighting

It seems that more emphasis are now being placed on spending less to gain more and in this is economy saving money is at the top of everyones list.