A Historic Year in Realty

by Joe Pinto

We have all just come through a historic year; 2007 was the first year in over forty years that home prices and sales dropped down instead of going up. Where does that leave us homeowners?
Surprisingly, for the majority of us, it is not quite as chronic as it sounds, as the lower priced homes only dropped by an average of $3,000. 00 on the purchase price over the year. The more expensive homes pushed the yearly figures up as the 'jumbo' mortgages on these were more volatile than on the average house.

The National Association of Realtors have been out there doing their homework, and they are predicting an upward trend in housing for the first quarter of 2008. Is this over optimistic?

Well, in many areas, inventory is down. Many people have been making the decision not to sell their homes. The reason for this is that interest rates have been dropping, making the existing mortgages of some home owners more attractive if they re-financed.

This means that fewer properties have been coming onto the market, so the choice of homes to purchase is more limited. Also, rents overall have gone upwards in price by nearly 2% which encourages more first time buyers to get out there and buy.

The penalty on a mortgage is often worth paying if the rate drops low enough. The rule of thumb on most drops in mortgage rates is this: if you have more than eighteen months to pay, it is most likely worth paying the penalty.

If this is the case with you, ask your lender to calculate it for you and make the decision. If you do not want to bother your lender, there are mortgage rate tables on line that members of the public can access.

Of course, the low interest rate is not tempting everybody into house buying - yet. Many people are waiting to see how low the house prices will go. Ironically it is only evident that the bottom is reached as they start to rise again, so the 'bottom' has been missed anyway!

Most home owners of experience know that if it is possible, then it is best to ride out the storm. Part of the storm in this case, has been a false inflation of realty prices that is simply re-adjusting. People who have owned their homes for more three years are probably still showing an increase in the equity of their homes.

Property is considered to be a safe bet as far as investments go. The monetary value of a home has almost doubled in the last ten years. This is not the type of interest rate you can hope to find for your savings account! Even the stocks and shares market does not offer such a risk-free return.

For first time buyers wondering if they should enter the market, the best advice would be to buy a home that does not stretch your budget to its utmost. Look for a home that needs a little TLC; if the price of your first home is low enough, you may have enough confidence to try renovating.

Many local hardware stores run free courses or workshops that teach many do-it-yourself skills. You have a better chance of remembering the procedures if you both attend the course. It can actually be fun to make-over a room, especially if there are two of you doing it.

There is an indescribable feeling when you have finally finished renovating a room and you stand back to admire your own handiwork. It is your choice of color and design and you realize that you have done a great job; it doesn't even matter that it's not perfect!

Joe Pinto, one of the top-producing agents in the Chicago real estate industry. With over 10 years of experience, Joe brings professionalism and hard work to help you in the sale or purchase of Albany Park Condos. For more information, visit Joe at ChicagoHomeEstates.com.