Scared away from the prospect of buying a home? Think buying a home no longer makes sense? Think again.
Consider these 10 reasons to buy a home in Los Angeles:
1. Deals can be made. Prices are down, in some cases 30% from their top. Are we at the bottom, who knows, but you will never know when we are, and now is as good a time as any to jump in. A lot of buyers have disappeared after the end of both the Federal and California tax breaks.
2. Mortgage rates are the lowest on record. Getting a 30 year fixed mortgage for around the mid 4% range is nothing to be sniffed at. How long this will last, who knows! Right now you are saving around a fifth of what it was two years ago in the low 6% range.
3. Tax breaks. This is on a case by case basis. The more you earn and the higher the mortgage the bigger the tax break. For these benefits you should consult an accountant. In some cases your mortgage may cost you less than renting.
4. The home is yours to do with as you will. Always wanted to decorate to your taste, redo the bathroom or kitchen but didn’t want to upgrade someone else’s home, now you can. It’s your own.
5. Get a nicer home in a nicer neighborhood. Sometimes you cannot find a nice rental in a neighborhood in which you want to live because they are all condos. Of course sometimes the condos cannot be sold and are converted to rentals, but generally those rentals prices are going to be restrictive. You may as well own one and pay your own mortgage instead of someone else’s.
6. Inflation protection. It has been suggested that holding onto real estate is the best hedge against inflation by a couple of percentage points per year. Government bonds that offered inflation protection in the past have seen their yields drop considerably. This makes home ownership more attractive.
7. Suffer from risk aversion? Owning stock is not for everyone. However, in the long term, real estate is going to go up, and if you are considering owning your home for several years, it is the best long-term investment.
8. Forced savings. This is something you have to carefully calculate. Sometimes it does not make sense to own. Say if your rent is presently $1,500 a month and a mortgage is going to cost you $3,000. However, for those who do not save, the difference put into a mortgage and used to pay of the principal is building yourself equity, hence forcing you to save.
9. More choice of homes. With inventory high and more coming on the market, buyers have a huge choice of properties at great prices.
10. This market won’t last forever. The population is growing and the demand for housing will eventually catch up. You have the choice and an ideal pricing environment right now. Take advantage.
Well this post is certainly showing it’s age!
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