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by Grant Whittenberger
Across the nation, headlines continue to paint a gloomy picture of the current real estate market. Experts speak out in despair about mortgage rates, housing markets and foreclosures. And while much of what they say is true, the slowing market offers a silver lining for many potential homebuyers.
“A down market can offer plenty of benefits to homebuyers,” explains Grant Whittenberger, Vice President of Sales for Buffington Signature Homes. “With low interest rates, higher rents and lots of great homes to choose from, it’s actually a great time to consider buying a new home in Austin.”
To help potential buyers understand how they can benefit from the current market, Mr. Whittenberger shared these important factors that could make it the perfect time to buy a home.
With more people moving out of their homes and more potential homebuyers opting to wait, renters find themselves facing fewer options and higher prices for apartments and leases. Apartment complexes, rental agencies and rental property owners are facing higher costs for maintenance and upkeep, forcing a rise in their rates across the country. As rental rates continue to climb, the price stability of a fixed mortgage payment becomes a much more attractive option.
Low Interest Rates
Interest rates are still at near-record lows, making monthly mortgage payments considerably lower than what they would have been in the height of the real estate boom. And despite tighter standards on lending practices and requirements, lenders are still eager to work with buyers who have good credit. First-time homebuyers today can lock-in at considerably lower rates than those who bought in a few years ago, and existing homeowners can move up to a bigger or better home with substantially lower interest costs.
Many production builders are facing a surplus of inventory homes with a declining number of potential buyers, and they are cutting prices in response. “The last few years saw home prices rise at their fastest pace in history,” explains Whittenberger, “and it didn’t take long before they reached levels that a lot of buyers couldn’t afford. As builders adjust to the current market, prices are returning to normal levels and many new buyers have a chance to enter the market again.”
Along with lower prices, an overabundance of homes on the market can also provide buyers with plenty of opportunities to shop around for the perfect home. New community developments have been popping up throughout the region, with great new homes in Austin, as well as Round Rock and Cedar Park, offering buyers more choices than ever before. Buffington’s newest communities include Silver Leaf in Round Rock, Forest Oaks in Cedar Park, as well as two premier South Austin communities, The Bridges at Bear Creek and Southpark Meadows. The wide variety of homesites and options available in these communities means any buyer can find a home that fits their unique style and needs.
Energy Efficiency & Innovative Features
Every year new developments in appliances, construction techniques and green technologies help make homes use less water, gas and electricity. “New efficient construction techniques and Energy Star appliances help Buffington’s homes significantly reduce your monthly utility bills, potentially knocking hundreds of dollars off of your expenses,” explains Whittenberger. “We’ve also designed our homes around the way people live today, with contemporary features like additional wiring for internet and cable, specially-designed computer spaces and pre-wired setups for HDTVs.”
Investment & Appreciation
Despite the ups and downs, there is virtually no other investment or purchase that carries the same track record for value appreciation as homeownership. On the national level, home appreciation has historically risen 5 to 6 percent each year. And from 1991 to 2007 the median price of a new home rose from $120,000 to $246,900, more than doubling in value. Compared with the drastic potential for loss in the stock market, investing in a home is safe and profitable.
Added to the increased value of your home each year, significant tax incentives are in place to make owning (and eventually selling) that home more affordable. In most instances, any money you spend on interest and property taxes can be fully deducted from your income, saving thousands on taxes. Collectively, homeowners save almost $100 billion on mortgage interest and property deductions each year. And when it comes time to sell you home, more tax breaks help to ensure you make the most of your home’s appreciation.
The Economy in Austin & Texas
Despite the national downturn in the housing market, the economy in Austin and throughout Texas has remained comparatively strong. Thanks to Austin’s thriving business and technology industries, and large defense and oil industry influences across Texas, the housing market has remained relatively insulated from the extreme highs and lows found in other areas. In fact, Entrepreneur magazine recently placed the Austin/Killeen/Round Rock area at the top of its “Best Places to Buy” list, citing low prices and high job growth as key indicators. While that may insulate the market from the extreme low prices found in other parts of the country, it also means your home will likely be a more secure investment with a greater resale potential.
The time is NOW
Production builders continue to adjust their business to meet the conditions of the market, cutting back on their new supply of homes and cutting prices on their existing inventory. Many experts believe the production and inventory of homes on the market will return to normal levels by later this year. “Then the opportunity will be gone,” says Whittenberger. “As builders adjust the market, there are great chances for buyers to come out ahead, but once the adjustment is over, most of those chances will have passed.”
For those hoping to “time the market” and make the most of current conditions: The time is NOW.
For more information on the best new homes in South Austin, Round Rock, and Cedar Park, visit www.mybuffington.com/aas.
About Buffington Signature Homes
Buffington Signature Homes is dedicated to building homes that will last a lifetime. A locally owned company with a wealth of experience, Buffington Signature Homes combines innovative floor plans, skilled craftsmanship and an exceptional buying experience to deliver homes with value that each and every customer is proud to live in. Proudly building fine communities and new homes in South Austin, Round Rock and Cedar Park. Home prices vary per community, from the $210’s to the mid $300’s, ranging in size from 2000 to 3700 sq ft with new plans in development to go over 4000 sq ft.
Vice President of Sales & Marketing