Sue Fox, @Properties. Direct 773.816.1788
Subscribe to Site
- FHA loans
- Market conditions
- Tax credits
Real Estate radio
It always amazes me when I compare today’s cautious home buyers to the buyers of 3 or 4 or 5 years ago, who were willing to spend top dollar, at interest rates of perhaps 6 and 6.5%, to buy a home. Buying Chicago real estate is a MUCH better deal now, with prices down 20-30% in some neighborhoods, and banks offering rock-bottom mortgage rates of 4.5% or less for a 30-year, fixed loan.
Basically, if you buy today, you could get the same property at a huge discount compared to what you would have spent on it a few years ago. Yet buyers seem to be sitting on their hands during one of the best buyer’s markets ever, afraid to make a move.
So I was glad to see that Karl Case, an economics professor who was one of the creators of the widely-read Case-Shiller housing index, wrote an op-ed piece yesterday in the New York Times explaining that real estate was still a good investment, especially given today’s low prices and interest rates.
“This financial crisis has made us all too aware that we live in a Catch-22 world: the performance of the housing market drives the economy, and the performance of the economy drives the housing market,” Case wrote. “But housing has perhaps never been a better bargain, and sooner or later buyers will regain faith, inventories will shrink to reasonable levels, prices will rise and we’ll even start building again.”
Case explained that the advantages of today’s lower home prices and interest rates translated into savings of hundreds of dollars per month on an ordinary house. He also pointed out that home owners can deduct the interest they pay on their mortgage, a tax break unavailable to renters.
This is, quite simply, an extraordinarily good time to buy a house. That’s what I try to tell my skittish buyers, emphasizing to them that if they plan to stay in the home for years (which I recommend), in all likelihood they will be making a sound investment.
But perhaps all optimistic realtors sound like… optimistic realtors. Maybe Karl Case says it better. To read Case’s piece, click here.
Leave a Reply
- Sizzle is back in the South Loop
- How to Buy a Chicago Foreclosure (as Supply Steadily Shrinks)
- Home prices jump 15% in 2014, but cold weather chills sales
- Lincoln Square on a Tear as Average House Price Tops $600,000
- More choices ahead for Chicago buyers as rally cools