Why Real Estate, Right Now?

Lately the media has been pounding both the real estate industry and Wall Street, so why is it a good idea to buy real estate, right now, in this economy?

President Obama has three parts to his plan to fix the financial crisis. The first on his agenda is to fix the banking system so students can continue to get education loans, small businesses and entrepreneurs can continue to get business loans, and so the American people can fulfill the American dream of homeownership.

The National Association of Realtors (NAR) keeps statistics of the National Housing Cost. September of 1981 was the peak of the real estate industry of the late 70s and early 80s. Taking an average of the top twenty largest real estate markets (i.e. Los Angeles, New York City, Chicago, Orlando, Las Vegas, Phoenix, etc.), the NAR figured the COST ratio (income to cost of housing) was at a high of 63%!

That means, in order to purchase a home, it cost 63% of your income to pay your mortgage. In other words, if you made $5000/month, it cost $3150/mo for your mortgage payment. That is simply astronomical!

When the real estate market was at its peak just a year or two years ago, the cost ratio of housing cost to income had dropped to 39%. That was when we thought real estate was expensive.

Today, the cost needed to afford a home is 27%, an all-time low. It is cheaper to own a house today, in terms of price and income ratio, than it has been for generations.

It all has to do with supply and demand. Right now, there is a greater supply of foreclosures than there has been for years which is the perfect opportunity for investors to buy cheap. Folks, real estate is on sale right now!

Statistics prove that the real estate market will eventually go back up. And when it does, who will sell? The investors.

Warren Buffet, the richest man in the world, recently said in the New York Times, "So if you wait for the robins, spring will be over." He was referring to the investment market, which includes stocks and real estate.

"When the richest man in the world speaks, I listen and take notes. Even though this may seem to some like simple homespun wisdom, Mr. Buffett is perhaps the most respected investment adviser in America, if not the World. He started investing when he was a child and because of his passion and his focus, he is now worth over 50 billion dollars. [He recently said], "Buy American I Am." in the October 17th edition of the New York Times."(Taken from Real Estate Blog).

Buffet also said, "In short, bad news is an investor's best friend. It lets you buy a slice of America's future at a marked-down price."

When should we start buying real estate? Right Now! It is the best time in history, for generations, to buy real estate. It's on sale and I'm buyin'!