5 Reasons to Buy a Home Now

5 Reasons to Buy a Home Now
Conditions are nearly perfect to get a super bargain. But don't dally.

October 1, 2009
If you've been waiting for home prices or interest rates to fall further before you buy a home, it's time to rethink your strategy. If you act soon, you'll be able to take advantage of historically low prices and interest rates that won't be around forever. And if you're a first-time buyer and you act very soon, you can still take advantage of an $8,000 tax credit. Here are five reasons to take the plunge now.

1. You may get a fat tax credit.
The first-time home buyer's tax credit is worth 10% of the home's purchase price, up to a maximum of $8,000. But to lock in the credit, you must close on your purchase by November 30. Given that it usually takes a minimum of 30 to 45 days to get to closing after you and the seller have a ratified purchase contract, your real deadline is closer to October 1.
You don't qualify for the credit if you owned a primary residence in the past three years. And the credit begins to phase out when adjusted gross income is more than $75,000 for single filers, or $150,000 for married couples filing jointly (those with incomes of more than $95,000 and $170,000, respectively, will not receive a credit).
Although several bills before Congress propose to extend or even expand the credit, don't count on it. Legislators are preoccupied with health-care reform and concerned about increasing the federal deficit.

2. Prices are scraping bottom.
It's hard to know whether prices are as low as they'll go, but the housing market is showing signs of life. Between the first and second quarter of 2009, the S&P/Case-Shiller Home Price Indices, a measure of U.S. home prices, rose by 3%. That's the first quarter-over-quarter increase in three years.
Robert Shiller, an economics professor at Yale and a developer of the S&P/Case-Shiller Home Price Indices, says it's too soon to call the uptick a turning point. He says that it may indicate only that the decline in home prices-some 30% since the housing market's peak in mid 2006-is slowing.
The National Association of Realtors (NAR) says homes haven't been this affordable since the 1970s. Based on average income and median home price, a little more than two-thirds of California households could afford to buy an entry-level home during the second quarter of this year, compared with just less than half a year ago.

3. Foreclosures are at record highs.
Distressed sales (foreclosures and short sales) accounted for more than a third of all home-sale transactions in the second quarter of 2009-and represent an opportunity to buy a home at a deep discount.
Such homes typically sell for a 15% to 20% discount from market value. California, Arizona, Florida and Nevada continue to experience the sharpest price declines. Foreclosures will continue to rise with the jobless rate and the last wave of subprime-mortgage delinquencies, despite relief efforts by lenders and the Obama administration.
There are caveats. When REOs (real estate owned by the bank after foreclosure) hit the market, the banks receive multiple offers, often above full price. The banks prefer investors who will pay with cash over "regular" buyers who must seek financing, and they prefer conventional financing over Federal Housing Administration or Department of Veterans Affairs loans.
Buyers think foreclosures are a great deal until they see them in person and realize that often, they need a lot of work. That puts off entry-level buyers who need to save their cash for a down payment or furniture. You're more likely to find a bargain if you work with an agent who handles a lot of foreclosures and gets a heads-up on sales before they hit the market.
Short sales can also be dicey. A short sale means the lender is allowing a home to be sold for less than the mortgage amount. Short sales require patient buyers who can wait out the two to six months typically required to get approval from the bank. Meanwhile, the deal may fall through because the sellers disappear or choose not to cooperate with the process. Or the property could end up in foreclosure because the sellers haven't made their mortgage payments.

4. Rates are cheap.
If there's a silver lining to the recession, it's that interest rates will stay low. That's because investors continue to seek the safety of long-term Treasury bonds, which largely determine mortgage rates. Throughout most of this year, the 30-year fixed rate has hovered near 5%. The 5/1 adjustable-rate mortgage, which has a fixed rate for five years and then converts to a one-year ARM, recently averaged 4.8%.
Keith Gumbinger, who closely follows interest-rate trends as vice-president of financial-publishing firm HSH Associates, expects the 30-year fixed rate to stay around 5.5% for the rest of 2009, absent either a market collapse or economic growth (especially stepped-up hiring). He says that downward and upward forces on rates are canceling each other out right now.
If you can qualify for a mortgage on the home you want at today's rate, holding out for a slightly lower rate is probably a fool's errand. And, if inflation resurges, locking in today's interest rate (and mortgage payment) will look brilliant in hindsight.
To get the best rate, you must put 20% down and have a credit score of 720 or more. Many home buyers have turned to FHA-backed loans, which require a minimum down payment of 3.5% of the purchase price

5. Demand is growing.
In July 2009, existing home sales rose 5% over the year before-the first year-over-year gain since November 2005, according to the NAR. That period also marked an increase in sales over four consecutive months, for the first time since June 2004 (except in the West, where sales fell by 2% between June and July).

The NAR reports that the number of homes for sale fell by 11% from the year before, and at the current pace of sales, that represents a 9.4 months' supply (a four- to six-month supply represents a market balanced between buyers and sellers).
In some areas, competition for deals can be fierce. Atlanta's Debbie Sonenshine, of Coldwell Banker, says that a good house at a good price will get multiple offers and sell quickly. What's a good house? It's clean, it shows well, and it's in a good neighborhood in a good school district.

Healing affects of the Ocean

In these turbulent times, I find it comforting to remind myself and others how very fortunate we are to live close to Ocean. Those sea breezes blowing through our homes and lives, will hopefully clear our minds and show us how truly blessed we are to live in such a wonderful Coastal area of North Carolina.

Here is an article I would like to share, regarding the "Healing affects of the Ocean".

• The physical and spiritual appeal of water has attracted the infirm and weary throughout history. There is even a special word for the use of seawater in health restoration and maintenance -- "thalassotherapy," which was first written about by Hippocrates. Thalassotherapy comes from the Greek "thalassa" meaning water and "therapia" meaning to heal. The Greeks soaked in sea water hot tubs and heated seaweed baths, drank and inhaled sea water for health, got sea water massages, had sea green facials and body wraps, and used sea water pools for hydrotherapy and elimination of toxins from the body. In modern upscale spas and resorts the sea is used to reduce tension and stress, detoxify the skin and improve circulation, speed weight loss and cellulite control, and even ease menopausal discomforts.
• The ocean is therapeutic and a boundless reservoir of health. It contains all the vital elements: vitamins, mineral salts, trace elements, amino acids and living microorganisms which secrete antibiotic, bacteriostatic and hormonal substances with biological balancing effects. These substances are easily assimilated by our bodies during sea bathing. An interesting fact is that seawater has a similar composition as our blood plasma.
• You don't have to get wet to have the ocean work its healing magic. The gas molecules in the ocean mist create a genuine spray rich in iodine, which helps regulate the thyroid gland. The spray is also loaded with negative ions. Negatives ions strengthen the body's immunological defense mechanisms. This mist of extremely small molecules enters the body through the respiratory system, where they attach to the walls of the lungs for distribution throughout the body.
• Direct contact with ocean water is even more therapeutic. Bathing in seawater acts directly on chronic disorders, helping one overcome ailments, aches and pains. Cool seawater calms down overwrought nerves, tranquilizing the whole body. It also tones up the body, making it more resilient. Warm seawater, during our summer months, improves the circulation and relaxes muscles.
• Seawater baths open the pores and help eliminate toxins from the body. Swimming and wading brings our bodies in contact with the sea's pulsating and massaging waves, its rare minerals, and dissolved gases.
• Although few realize, our skin is our largest organ and absorbs chemicals just as readily as it excretes through sweat. The magnesium content of seawater is significant enough to have a nutritional and calming effect on our nerves, which explains why sea bathing is so relaxing. Potassium in seawater enters the skin and encourages good urinary flow. Seawater contains all the 89 known elements present in our bodies, including osmium, gold, vanadium, zinc, and iodine.
• The skin is the exchange barrier through which these substances pass into the blood stream from the surrounding environment. During swimming, the negative ions move through the epidermis into the dermis, where they are taken up by the capillaries and distributed by the blood to various organs. Calcium ions are carried to the bones while the potassium ions are directed towards the muscles.
• The therapeutic effects of the ocean go far beyond mere physical benefits. The sea makes us dream. It promotes a feeling of liberation and wanderlust. To sailors, there is no feeling so liberating as the ocean breeze filling the sails. Our evolutionary roots are in the sea and we are drawn to it in an almost mystical manner.
• We stand hypnotically on the seashore or on cliffs and look at the ocean for extended periods of time. The sound of the ocean flowing and crashing against rocks fills us with wonder and promotes a profound sense of calmness. The sea has the power can relax us, relive our stress and pain, renew us and soothe our souls.
• The sea provides a healing magic that goes beyond drugs and prescriptions. It forces us to become involved with it. The ocean draws on the strength of plants from the Earth, the water that is a part of all life and the mineral salts from which our bodies are created.
  From a metaphysical perspective, water is associated with creativity and our feelings and is the seat of our unconscious patterns. It has to do with emotions that we have suppressed and buried. Being close to the ocean deepens our contemplation and helps us bring these patterns and feelings to the surface so we may recognize and deal with them.
• In color therapy, ocean blue is used to balance or enhance freedom of expression verbally and artistically, integrity, honesty, loyalty, reliability, gentleness, kindness, commitment and endurance.