Long Island Homebuyers – Great Buying Opportunity – Don’t Miss Out!

Are you a renter on Long Island that has been thinking about buying a home, but have doubts because of the things that you are hearing about the housing market?  Are you waiting for the media to declare the bottom of the housing market?  Do you feel that it is in your best interest to wait and see what happens?  If you answered "yes" to any or all of these questions, there are some facts that you should be aware of before you make your final decision. 

Did you know that the media uses national statistics to forecast the real estate market?  National statistics make for sensational news reports, but they do not accurately depict the story about specific local markets.  Since you are buying your home in a local market, you should be aware of local statistics and local trends. 

For example, a report came out yesterday that said that new home construction plunged last year to the lowest that it's been in 27 years.  Anyone reading that would understandably be very concerned about market conditions.  However, on Long Island, we have such minimal new construction that this statistic is negligible to Long Island buyers and sellers.

Did you know that the data used by "experts" and reported in the media is a lagging indicator?  This means that this information is looking backwards instead of looking ahead.  By the time that the media declares the bottom of the market, they will only be doing so because the markets have already risen.  They cannot look ahead with certainty, because none of us can.

You might be thinking that it's okay to buy when the market starts to rise, even if you miss the bottom of the market.  That may be true, but there is another factor to consider when deciding whether or not to look for a home now.  Mortgage rates are near historical lows right now.  There is no guarantee that the rates will be this low by the time that the media says that it's ok to jump back into the pool (so to speak). 

You may be able to purchase a home for less money if you wait, but if the mortgage rates are higher when you decide to purchase, your monthly payments could be higher than what they would be if you purchase a home now.  You should also consider the fact that mortgage programs are being discontinued daily, and tighter lending restrictions are being applied.  Do you have a contingency plan if you can't qualify for a mortgage when you are finally ready to buy?

I worked with buyers recently that would have been able to get financing with almost no money down a few years ago.  Today, because of credit issues and a lack of a down payment, they have no choice but to rent until they can repair their credit and come up with more money for a down payment.  This is because we are returning to a more "normal" real estate market, and lenders are following suit.

Should you decide to wait and see what happens with the market, you may be left on the sidelines when the rebound occurs.  Your monthly payment on a home this year may very well be hundreds of dollars cheaper than it would be on the same home once the media reports that the market has recovered.

Are there markets across the country that are still in decline?  Yes, there are.  Are there markets that are declining or staying flat on Long Island currently?  Yes there are.  However, there are also markets that are rising right here on Long Island.  For example, homes in the Bethpage school district were more expensive in the third and fourth quarters of 2007 than they were in 2006.  If you were a buyer looking in this area, and you decided to wait things out to see what happens, you would actually be getting less for your money when you do decide to buy, because your decision was based on the picture that is being painted by the media, rather than what is actually happening locally.

As a buyer in this market, you have an outstanding opportunity to find a home that fits your needs in a price range that fits your budget.  Generally speaking, inventory on Long Island is higher than it was a year ago, so there are more homes to choose from in every price range.

We are returning to a "normal" market, which means that we should be approaching the purchase of a home the way that we did before the red hot seller's market.  Before the real estate boom, people were buying homes because it was a place to live.  The market edged up slowly and equity was built by paying off a mortgage.  Too many people nowadays are treating a home purchase solely as an investment, and not as a place to live. 

If you are looking to buy a home and move within a year or so, then it may be in your best interest to wait and see what happens.  However, if you are looking to buy a home and live in that home for a number of years, there is no time like the present to buy because no one knows exactly what is going to happen in the future.