These days, the news is full of commentary about the housing market, and people are very willing to give advice on what to and not to do in this climate. Recently, Suze Orman, a well-known financial expert, provided her insights on an episode of the Joy Behar show. Suze was very conservative with her financial advice, and her guidance suggests that it would be a mistake for buyers to enter the market without meeting her very strict criteria for purchasing a home, and that renting is the way to go. You can view her comments on the transcript of that show.
Our very own Todd Hetherington, CEO of CENTURY 21 New Millennium Real Estate, had a very different perspective on what a homebuyer should consider in this market. Todd has provided his perspective below:
As an avid real estate investor and a broker/owner of a real estate firm for the past twenty-one years, I have to chime in with some respectful differences of opinion than those offered by Suze Orman. Suze’s comments in my opinion, though well intentioned, are far too broad and not applicable to the scenarios that we are creating day in and day out in our marketplace. A well qualified buyer with a stable job that is going to be in our area for at least the next 5 or so years should most definitely purchase a home as opposed to rent one.
Over the past 25 years, I have personally purchased real estate in virtually every type of market- appreciating; depreciating, flat…you name it. In all of those markets, those of us that were not greedy and unrealistic reaped heavy dividends from our real estate investments. And, yes, I am factoring in the most recent market from Aug 2005 through the present as well.
I live and run my business in the Washington, DC metro area where we are fortunate to have unemployment rates that are literally half that of the national rate. We also have fifteen military installations within a thirty-mile radius of where I sit right now as well as the federal government as our nucleus. In many of our close locations, prices went virtually unaffected. Even in our outlying areas, our real estate values have stabilized and have even appreciated modestly. Those that purchase today, especially with a VA no down payment loan or a FHA low down payment (as low as 3.5%), and hold on to the property for at least the next 7-10 years will benefit very nicely and will be extremely happy that they have their home as an investment.
What other investment can you leverage the use of other people’s money (in a calculated financial planning way), receive a tax advantage (which makes terrific sense since homeowners will typically invest more money into the local economy thus benefiting everyone), and have the added benefit of a roof and shelter over your head? None. Rents in our area are going up every month. Interest rates are at unprecedented lows. Housing affordability is at pre 2005 levels. We should be (and are) screaming from the rooftops- NOW IS THE PERFECT TIME TO BUY A HOME!
CENTURY 21 New Millennium. Smarter. Bolder. Faster.
CENTURY 21 New Millennium, www.c21nm.com, is a full service real estate brokerage company specializing in residential and luxury properties. The Virginia locations are in Alexandria, Centreville, Culpeper, Fredericksburg, Gainesville, McLean, Stafford, and Woodbridge. The Maryland offices are located in Annapolis, Dunkirk, La Plata, Lexington Park and Lusby. Its core services include: mortgage financing, investing, settlement services, property management, property insurance, global relocation assistance, and commercial real estate.