Many buyers are saying:
a) I’m waiting for the prices to go lower and
b) I’d only buy at 20-25% below the asking price.
In response, here are the reasons to buy now.
1. As all the weathered veterans know, it’s impossible to catch the bottom of the curve and the only time to know it’s the bottom of the curve is after the fact.
2. We know you believe it’s a curve; otherwise you wouldn’t be considering buying. For long-term investments, it is not so critical to catch the exact bottom of the bell curve because one never really knows where the bottom is or top for that matter. To prove the point, look back a number of months and point out which purported experts knew when we were at the exact top of the market.
3. There is always a limited supply of townhouses on the market. If you wait for the most desirable townhouse to be on the market and also available at the perceived lowest price, you are facing a recipe for frustration.
4. Bricks and mortar are a better investment than stocks. “Better than cash under the mattress: Experts say multi-family buildings are the most recession-proof investment.” > (The Real Deal, p.71)
5. Interest rates are at historical lows.
6. In contrast to the last six months of 2008, when sellers were not willing to admit that prices should be moderated, we now have a number of sellers who are willing to price their townhouses to sell in the current climate.
7. Definition of a “good deal”: a townhouse that can be purchased for 20-25% below its value in the previous market. This is NOT to say 20-25% below the current asking price. Many current asking prices are already properly adjusted to “good deal” values.
8. Finally, for renters, if you wait another year and continue renting you are throwing your money out the window. As an owner you will be getting the tax benefits associated with homeowners, including mortgage, interest and real estate tax deductions, as well as depreciation.