The Top 10 Reasons to Buy in 2011

Now that the Pumpkin Patch Party is over (great success and next year El Dorado High School sports teams will have their own Pumpkin Patch Party the day after in order to raise funds for their respective teams) it is time to think about real estate. You may hear all the time (or at lease every time you speak to a real estate agent) that it is a great time to buy (or sell) a home. Well, believe it or not, in the next 12 months, it will be a good time to do both and I have prepared a David Letterman-like list for both. Let's start with the Top 10 Reasons to Buy:

1) Thousands of homes to choose from.
Inventory, comprised of equity sellers, relocations, foreclosures, short sales and standard sales are flooding the market. There are a plethora of homes from which to choose. A bunch. A lot. You don't have to settle. You will find a home in the location and amenities you want.

2) Interest rates are at 40 year lows (4%).
A few years from now, when rates are at historical norms (7%), everyone will talk whistfully about the days of incredibly low rates. These days. It will be like we talk about the times gas was rationed or when we bought vinyl LPs.

3) Prices are down 30% from the peak.
I just listed today (lovely home, please call if you are in the market) a home for $400,000. The owner paid $550,000 in early 2006 and put another $50,000 in it in improvements. At this price, at these rates, it is cheaper to buy this home (with tax deductions) than it is to lease it. Can prices fall further? Perhaps. Will they drop another 10 or 10%? Hardly. This is "buy low" time.

4) 3 Words: Bank Owned Properties.
Mark my words, 2011 will be the year of the foreclosures. Banks have healthy balance sheets and no appetite for non-performing loans. The current moratorium on foreclosures will end soon, and there will be ample bank owned properties on the market. This will keep prices down, inventory up, and excitement in the marketplace.

5) 2 Words: Short Sales.
The days of avoiding the dreaded "short sale" is over. An agent in my office had full approval on a Chase Short Sale in 60 days and it will close in 30. They sellers owe $1.1mm and the sales price is $850,000. Chase will take a $300,000, the sellers will take a ding on their credit but not a foreclosure, the buyer gets a great deal, and the agents get paid properly. If handled professionally by the listing agent and if the sellers are cooperative, a Short Sale can be a beautiful thing.

Look for the next 5 next week....