The New York Times sees a silver lining in the current real estate market, pointing out that it could be a very good time for first-time home owners to get into the market. First time buyers don't have to wait to sell a home, the sheer volume of unsold homes (hello, Palmdale!) can make the bidding process easy, and developers on all those new unsold homes are often willing to cut deals. Also, there are tax incentives to buy and prices historically drop in the winter months. That's the upside. On the flip side: Do you have job security? (California unemployment is over 8 percent.) More importantly, the market isn't close to bottom in some regions, according to a October 2008 study that looks at what metro areas will see negative equity by 2012 for first-time homebuyers.
"The verdict was that buyers in 33 of the markets could see a decline by 2012, including potential six-figure drops on an average home in the New York City, Los Angeles, San Francisco and Seattle metropolitan areas. This is obviously scary. (I’ve linked to the study, a joint effort of the Center for Economic and Policy Research and the National Low Income Housing Coalition, from the version of this article at nytimes.com/yourmoney.) It’s worth noting, however, that these predictions came before the government made its most recent move to reduce borrowing costs." Then again, if you're getting that Eagle Rock home of your dreams, you may not care if your home dips in value. According to the National Association of Realtors, first-time home owners are now planning to stay in their homes for 10 years, up from 7 years as reported last year. Related: Here's that crazy fun Rent Vs. Own comparison chart.
· It May Be Time to Think About Buying a House [NY Times]