Prices are high in most places, even though they have continued to spiral downward. Income has failed to keep pace with housing costs. Home prices are dangerously high compared to rental prices, and therefore more are renting instead of buying. Anyone who bought a home last year is feeling the pinch of the declining market as the price of their home has gone down. Home prices will continue to fall for a long period of time.
Banks, although many have stricter qualifications than ever, are still lending 6 times the client's income, with only a bare minimum down payment. Sellers in some areas are still asking a ton of money for properties.
Moderately priced homes have for the most part come down to affordability, but now look for the upper price range homes to lose ground. More of the higher income bracket have watched their home prices slide also. Look for more million dollar homes to become available, as more are strategically defaulting because of this.
Payments on a home come to about 9% of the purchase price versus 3% to rent. The cost of a moderately priced home now equals out to the cost of renting however the difference is the cost of maintaining it. The owner usually pays for repairs on a rental. The cost to buy an upper priced home vs rental is different. The cost to rent it far lower than buying it.
The upper priced market will continue to fall until it levels out and stabalizes and reaches affordability just as the moderately priced homes have done. There are bargains to be found in the moderately priced sector now.
If all you can do is rent now, take heart in the fact that you can save money in the long run because you are not loosing money on declining house prices.
If you are an investor, remember the bottom is when you can rent a home out and cash flow. Try for some wholesale deals however, you can make out by buying in bulk. Ask me how.
http://www.nevadainvestmenthomes/ for real estate info.
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