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Forget the Market. Buy a House

With the Dow Jones Industrial Average down more than 400 points today, and many market experts predicting more volatility ahead, some advisers are recommending their clients put some of their cash to another use: To buy that house or summer home at the shore.

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Potential homebuyers certainly have plenty of incentives: Home prices are still way down in many parts of the country, and mortgage rates are nearing their all-time lows. Consider: The benchmark 30-year fixed-rate mortgage fell 1 basis point this week, to 4.45 percent — just a few basis points above the record low hit in October 2010, according to the national survey of large lenders. Freddie Mac, meanwhile, reported today that the 30-year fixed-rate mortgage averaged 4.15% for the week ended Aug. 18, its lowest reported rate in 50 years.

Another reason to act now, say experts: While the recent passage of the debt deal is likely to keep mortgage rates low for now, homebuyers could soon find themselves with fewer incentives once the details of the debt deal are ironed out. Lawmakers have been debating a simpler tax system with lower tax rates and fewer tax breaks that could include reducing the generous mortgage tax deduction as part of the long-term spending cuts that must be agreed on this fall.

Of course, buyers still need significant down payments, stellar credit and job security, but if “you’re financially prepared to do so, it’s a great time to buy a house,” says Greg McBride, senior financial analyst at “Affordability is tremendous, and if you’re in a position where you have the financial security that others are lacking, you’re in a great position to grab a good deal.” Rebecca Hall, a financial planner in Reston, Va., said several of her clients have decided to buy second homes instead of putting more money in the market. “People don’t view real estate as volatile as the market,” says Hall. “Housing prices go down, but people aren’t on-line looking at it every day,” she says. “You view housing as a much longer term investment so it’s a little easier to handle [the volatility].”

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    • The pandora warm autumn wind, air mixed into the firecrackers fire taste;

    • 1

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    • I would buy a new home, but it would be like buying a new car. A new car loses value as soon as you take possession. Unlike a new car, the builder does not take trade in’s.

    • You Nay sayers are cracking me up. You might not be in California or some other state that sees great market swings. You might not have lived through other recessions or, at least, been in touch with real estate during those times. You might actually believe all the garbage out there. You have obvoiously never bought a car. If you had, you’d realize that a home is a much better investment than a car. The only time a car is going to regain any value is when its 25 years old, in excellent condition and someone actually wants it because you happened to buy the “cool car”.
      Someone posted that the market is gyrating. The last few recessions we saw what I would call “sawtoothing” probably the same thing as the gyrating comment. That’s where the values may go up a few percent (in Corona California we’ve seen increases of 10% to 15%) and then down a similar amount. Will we hit a double dip? Quite possibly if the government doesn’t keep us in this mess. If we look at history (especially here in California) we’ll see that housing has always had peaks and valleys. The valleys have never gone below the previous one and the peak has always, at least, doubled the previous one. If you buy a house today you may lose a little bit in value but unlike the car that loses value immediate and almost never gains it back, you will see the value come back (and probably double from this point).

      Quit whining… we should tell the government to stop messing around and let this thing do what it’s going to do. They should be focusing on getting people back in to homes instead of prolonging the inevitable.

      If you thinking of buying any of the Homes for sale in Corona I think you’ll find, in the near future, that you made a good investment. I realize California is different than many other states but all in all, real estate has and will come back.

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