John R Talbott is the author of "How I Predicted the Global Economic Crisis: The most amazing book you'll ever read". In a recent article in the Huffington Post Business Section Talbott outlines the reasons why he feels that buyers should get out and buy now.
The first reason he maintains is that today's prices relative to peak prices are at a point that are very attractive to consumers. In most cities the going prices are down 10%-60% from the peak housing prices which puts them at 1997 levels--before all the crazy lending practices came into practice. In some areas the very choice housing has not come down much and probably never will. For the purposes of Northern Virginia, 2003 pricing seems to be pretty much the average.
The second reason Talbott gives for buying now is the pricing relative to construction costs and replacement costs. In many cities across the country the price per square foot is around $60 to $80 a square foot. This is much less than it would cost to build the same home today.
The third reason Talbott gives is the current home pricing relative to Income and Rents. In the peak of the housing boom, some homes were selling for as much as 11 times the average income level. Most mortgage programs today are allowing mortgages at 3 to 4 times the salary of the applicant. This is in line with the wages paid and many times a property purchased today can offer positive cash flow immediately with the hope of future appreciation to be earned by the homeowner/investor. This is all positive news.
The fourth reason Talbott gives is the home pricing relative to US Treasury and future Inflation. Why value homes in US dollars he maintains when the US dollar has fallen 98% in purchasing power relative to gold? Why not value homes in units of gold? One could argue that gold is overpriced (at an all time high) yet Talbott argues that golds purchasing power had remained stable over time while the dollar is depreciating and more volatile.
Interestingly enough the spring market is appearing very early in Northern Virginia this year. The weather has been relatively mild and Open Houses are packed with potential buyers out looking for their dream homes.
If you're thinking of listing your home this spring consider doing so soon. Why not? The buyers are out and about and interest rates are very attractive. This is particularly important if you are looking to purchase a replacement property.
If you'd like to make the most of your real estate experience call me today. I will treat your transaction as if it were my own....
Carla Brooks
703-577-4960
PS All photos are a courtesy of http://www.freedigitalphotos.net
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