When I reflect on the current housing market I think of it as an old combination lock. The dial spins and then stops on a number. Inside the lock a tumbler falls into place. The result is an open lock, a golden opportunity. The combination to this lock is Availability, Interest Rate and Incentive. Below I discuss how those fortunate enough can seize this golden opportunity. You will have to act soon, though, because the combination will change!

Tumbler One: Availability

A major reason for the housing market downturn is an abundance of homes for sale. Look around as you drive anywhere in your town. Chances are you see several houses listed “For Sale.” Multiply that by two or three to account for new home builders unsold homes in your town, and you start to see just how many homes must be sold. When the number of homes for sale goes down, prices will begin to go up.

Tumbler Two: Interest Rates

The onslaught of horrifying news from the housing market has over-shadowed the fact that interest rates are still historically low. Interest rates are very important and it could cost you thousands of dollars over the life of your loan. The trend of interest rates holding low may have stopped. Many financial reporters predict that interest rates will begin to climb by or before the end of 2008. Now is time to start working with a lender and ensuring your credit report is as clean as possible. Your goal must be to get the best interest rate possible!

Tumbler Three: Incentive

Home owners may need to sell their homes because their mortgage is too high or their job is being relocated. Either way, there is a good chance the seller is willing to give a little, and maybe a lot. Home builders have seen far fewer buyers cross their thresholds. A builder would rather give a buyer an extra $10,000 incentive than hold onto the property for another four months while paying that $10,000 to the bank.

Speaking of banks, they have lent money to build homes or to mortgage homes. Many banks have had to assume some of those properties back by way of foreclosure. Be assured that the condition of a foreclosure home might not be to your standards. Holding on to the last few months of your rental agreement might be a good idea while you fix and repair a foreclosed home you’ve acquired.

Click! The Lock opens!

Homeownership is available to you. Seize the opportunity! There are two lessons to be learned from all tragedies you hear in the media. First, do not over buy. Chances are good that you can get a house for a good deal. Don’t exceed your monthly budget. Two, know in advance what kind of loan you want. Insist that your lender show you the details of your loan. At closing, insist that the title officer point out where in the documents your loan details are. If they are not what you wanted, stand up and walk away. Otherwise, it won’t get fixed and you’ll suffer financially.

Home ownership is a very real, very attainable dream. Reach out and grab it!

M. Allen Kemper,
Contributing Writer