Monday, July 21, 2008

BUYER’S MARKET COULD BE A GREAT OPPORTUNITY FOR FIRST HOME PURCHASE

Is now the best time to buy if you are shopping for your first home or condominium, or should you wait until the housing market recovers?

“It’s a buyers market out there,” says Nicholas S. Gouletas, chairman and president of American Invsco. “Now is the time to take advantage of the current market and make a solid investment for your future.

Gouletas, the nation’s condominium-conversion king, must know something. He has converted 40,000 apartments to condominium ownership since the early 1970s, and some experts say he is responsible for creating much of the ownership stability in Chicago’s lakefront neighborhoods.

The housing recovery may already be underway because the excess supply of for sale homes finally beginning to shrink, analysts say. The U.S. Commerce Department reported that the number of new homes for sale nationwide stood at 456,000 units in April of 2008. That’s 93,000 units below a year ago.

Although housing prices have declined sharply in other markets, prices in the Chicago-area appear to be stabilized and experts say sales activity here is on the rise.

The Illinois Association of Realtors (IAR) reported an upswing I home sales in May from April of 2008 in Chicagoland. Total home sales—both single-family homes and condos—were up 13.7 percent to 6,927 units in May from 6,096 units in April.

The IAR also reported that the median home-sale price in May was $251,000, off only slightly from $252,200 during the same month a year ago.

With an abundance of new and existing home and condominium listings on the market, now could be the best time in decades to stop collecting rent receipts and step across the threshold of your first home, experts say.

And, home-loan interest rates are holding in the low 6-percent range, about 1 percentage point above a 40-year bottom. First-time buyers who can qualify for a 1-year adjustable-rate conventional mortgage will pay an average of 5.17 percent interest now, compared with 5.71 percent a year ago.

In addition, some developers are also buying-down the interest rate on home loans to attract buyers. If you can qualify for a Federal Housing Administration-insured home loan your down payment can be as low as 3 percent.

Also, the current buyers’ market is forcing developers of new homes and condos to give serious purchasers some of the best deals in decades. Nearly all developers will offer some sort of perk to entice a buyer to sign a contract. Perks include free upgraded finishes, free parking, and free condo assessments.

So, where does a first-time buyer find the best deal on those first digs? “One of the best places to shop is the renovated condo market,” said Charles Huzenis, president of Jameson Realty Group.

For example, in such North Side Chicago neighborhoods as Andersonville, Edgewater, Rogers Park and Albany Park, there are dozens of vintage units in courtyard buildings, and prices currently range from $179,900 to less than $250,000 and immediate occupancy is available.