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Is now the time to buy a house?
This is a great article by Cullen Roche in Pragmatic Capitalism on the national real estate market and our greater Asheville market. We are in for a long “work out” period. As Cullen Roche states in Pragmatic Capitalism:
“Real estate is far more attractive than it was at any point in the last 8 years or so. Has it bottomed? That’s the wrong question in my opinion. Real estate likely won’t crater from here, but also won’t skyrocket. ”Bottoms” (as in an event bottom) are very unusual after a bubble like we’ve seen. The standard post-bubble “work out” period is the most likely scenario so prices could be flattish for years. So do you buy now, rent, invest? First, I don’t think the average retail investor should bother with investing in real estate. Real estate investing is a full-time job and requires a great deal of hands on involvement to actually turn a consistent profit above the rate of inflation over any sustained period. When you buy a house you should think of it as a roof over your head and a place where you will LIVE. Not an investment. And this is the key. If you’re planning on living in a house (as in, 10 years of actually living in a home) then you should have no great fears about buying today. Does that mean you’ll make money on it? Or that it will prove more beneficial than renting? Well, that depends on a lot of personal variables. But the base case here for national real estate is that the risk/reward of buying a home has changed substantially and is no longer skewed to the bear case.”
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