“From Ann, Mary on More Athens, GA Housing Trends # Should we buy real estate at this time? or just wait and see what will happend next? Then make decision.
This is a recent comment that I received from Mary Ann on a post I made over the weekend on Athens, GA home sales (stats). This seems to be a common question I face in my business as well. I have been beaten up at times on Zillow “Advice” sections by people in NV, CA, and FL, areas far greater hit by this economic “storm” the nation as a whole finds itself in, about how just because you “desire a home doesn’t mean you should buy one.”
Let me answer this objection about “desire to own a home” and Mary Ann’s question as well.
First off, I think we have to understand that a home is NOT an investment. It is a place to live. It is a better alternative for most than renting. IT IS a liability though and not an investment. This is true in any and every market good or bad. I say this because unless that asset you buy cash flows, meaning it generates more money than it costs you each month, as long as debt is attached to it, a home is a liability because “you” have to pay for it out of your own pocket. Therefore do we buy “now” or wait I think depends on whether the homes in the area you are looking are “affordable to you today.” Another way of saying this,”are they more affordable today to you personally than ever before?” If they are, and you would rather own than rent, you understand that building up “equity” is a bonus, not a given when it comes to buying a liability, not an asset, then buy today.
The reasons to own are numerous, but I will list the two I see most;
- Desire to Own a Home vs. Renting
- Investment
I think the overall answer to this question depends on your market. Where are you located, or rather where are you looking to buy. This makes all the difference in the world. As these figures in our market indicate, over the past year while national average prices having continued to fall another 20%, in Athens our average sales price has actually gone up.
Numbers of sales have fallen, which means longer days on market for sellers, but if you are buying in Athens or any area with similar sales figures then I would say that due to fewer buyers in the market and sales prices that have dropped, your biggest battle is buying before interest rates go up.
Rates have gone up in the past two weeks. They are still historically low in every respect.
Real estate markets always revolve around location, location, and location. Contrary to the way it is reported, there is no “national real estate market.”
The thing that I note as really impressive about our market is that in the year through June 1, 2008 the average sales price was at $170,059 while the year through June 1, 2009 had an increase in sales price to $172,050 with 36% fewer sales. Generally, high inventory, few sales, prices go down. Prices have not only maintained in each 12 month periods, as updated on a monthly basis, but also increased over this period ever so slightly.
Combine this with the fact that, according to real estate search engine Trulia, only roughly 8-10% of listings in Athens are foreclosure or pre-foreclosure as compared to many areas of the country where foreclosure sales make up north of 40% of sales, and it makes sense as to why home pricing has maintained on the average in Athens, Ga.
So to answer the question I started out with as the title of this post, “yes,” depending on your situation it might just be the perfect time to buy.
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