Should You Buy a Home Now?

Recent economic developments indicate that California may be the first state to find the bottom based on the increase in sales volume in the previous three months. In Orange County the number of sales has risen each month since January. As a matter of fact, sales are up 140%. Although approximately 40% of the transactions were foreclosures, short sales, and other distressed properties, the increase is allowing the market to stabilize by depleting some of the excess inventory. Some experts believe that once a neighborhood’s median price declines to 50 percent from the peak value that homes in that neighborhood will no longer depreciate. Median price in Orange County is hovering at $566,000 and has been pretty stable so far during 2008. Plenty of buyers are wondering if now is the right time to purchase a home, or should they wait for the “bottom of the market.” The ever elusive “bottom” too often escapes buyers simply because it is not a point in time; but rather a period of time that is observable only after prices are on their way up again. It is important to keep in mind that real estate is cyclical and is best viewed as a long term proposition.