Good time for home buyers

May 6, 2009 4:55:38 PM PDT
It is hard to find good news in these tough economic times, but there are a few rays of hope. Believe it or not one of them is housing sales. Houston economic experts say prices and interest rates are combining, to make it a good time to buy a house. In fact when was the last time you heard of multiple offers on homes for sale? It has been quite a while since we could say that, but realtors tell us it is happening now.

This two bedroom two bath home on Walker Street near the University of Houston had done what most other homes in our area have done, attract zero offers.

"We have had a lot of people looking at houses and they keep looking and they look four or five or six times at a house but not bring us an offer," said realtor Tim Surratt.

Surratt says that is now starting to change. The dry spell that started in October is coming to an end. He says some homes are getting multiple offers from motivated buyers looking to get in while the economic conditions are in their favor.

"They have been sitting on the fence and now interest rates are as low as they have been in the last 40 or 50 years, they are starting to get off the fence and actually make a decision," he told us. "A lot of people have tried to time the bottom perfectly where no one can do that."

Surratt says low interest rates, combined with falling prices and the new $8,000 tax credit for first time homebuyers, may have started to bring out buyers who have been waiting months to make a move.

"The perfect storm is just right for buyers and it is just right for buyers to make bids and they don't want to miss the window because it will be back in the sellers favor soon," Surratt said.

Surratt says the house on Walker Street has three offers and bidding war has even broken out.

"If you feel secure in what you are doing, it is an excellent time," Craig said.

Steven Craig is an economy professor for the University of Houston. While he has no crystal ball, Craig says interest rates are not likely to keep falling and will probably begin going up within the next few years. He adds if your job is safe, and you're looking to stay in the home for a few years, buying now makes sense.

"If you are one of those guys who wants to buy a house now and flip it in a year, which is what got us into this mess in the first place, then no," he advised.

One thing holding back buyers is getting financing. Realtors say buyers have to have a credit score in the 700 range to get the best interest rates and that has kept some potential buyers out of the market. What about down payments, are those going up?

It depends, you can FHA loan with 3.5% down, but as a general rule you may have to put down up to 10 to 20%.

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