Is It A Good Time To Buy A House, Condo, Townhouse or Investment Real Estate in Middle Tennessee?
As a real estate and short sale expert in Middle Tennessee, I am often asked “Is it a good time to buy real estate in Middle Tennessee?” The most common source of such questions are from would be home buyers thinking about buying a single family house, condo, or townhome. Basically, they want to know if buying a personal residence is a “good investment” or “safe investment”. Unfortunately, even with my years of experience and extensive knowledge of real estate law, Middle Tennessee short sales (stop foreclosure expertise) and familiarity with current market values in the counties, cities and neighborhoods I represent, there is no clear cut answer to that question. What I do tell would be home buyers is the following:
Buying a Home in Middle Tennessee
Buying a home in Middle Tennessee has been traditionally thought of as a ‘lifestyle choice,’ not as an investment. In other words, in the “olden days” people would buy a home because they were tired of renting and wanted the benefits of owning (i.e. no landlord). Folks would purchase a home in Middle Tennessee based on personal or family needs such as location, schools, floor plan, condition, etc. and how much they could afford. And since there weren’t many low down payment mortgage loans available, the ability of a buyer to purchase a home in Middle Tennessee was primarily determined by having enough down payment money (usually 20% or more) and excellent credit.
Because people with little cash and weak credit were frozen out of home ownership, the pool of buyers (i.e. demand) was kept relatively constant in most areas except for population growth. And since the US experienced a huge influx of immigrants and growth in new households in the post WWII era, these were the primary drivers for new home construction during that time. In other words, artificially increasing the home buying demand by making mortgage loans available to cash poor and/or credit challenged buyers was not a major driver of home prices or new home sales. Furthermore, home equity loans and HELOC’s did not really exist so home owners were not able to use their homes as ATM’s.
Attitudes Toward Debt and Consumer Spending
In general, consumers in the US were much more conservative in their attitudes toward debt and consumer spending. If you check out the numbers you will find that home price increased on average 2-3% per year from 1950-1970 and rarely declined by much. In other words, home prices were quite stable. Since 1970, however, home prices in the US have moved up and down with larger swings. There are several reasons for this, but the most important are that home buyers used to be overall stronger buyers with higher savings and less overall consumer debt. In other words, they did not live near the edge of a ‘financial abyss.’
Buying a House in Middle Tennessee You can Afford
There are significant tax advantages of buying a home in Middle Tennessee since you can write off the mortgage interest and real estate taxes. That being said, these tax benefits may go away soon so I would encourage you not to rely on them or allow this to sway your house purchase decision.
What I recommend is buying a Middle Tennessee home that you can realistically ‘afford.’ Look at your monthly debt payments (i.e. car loans, realistic credit card bills – not the minimum payment, personal loans, student loans, etc.); determine your monthly living expenses (groceries, household products, utilities, car maintenance, car fuel, medical and prescription costs, school and tuition fees, etc.); and compare it to your monthly income.
You can download a Borrower Income, Expenses & Financial Information form to help you calculate your actual monthly income and expenses. In all honesty, if you barely have any money left over at the end of the month and do not have substantial assets in a bank account, you really cannot afford the inherent risk of home ownership that is associated with buying real estate in Middle Tennessee.
Middle Tennessee Distressed Property – The Closest Thing to a “Safe Investment”
The best way to protect yourself from the large market swings that have hit the housing market in recent years is to purchase Middle Tennessee distressed property (short sales, foreclosures/REO’s) at well below market price.
This distressed price discount will help insulate you from further market declines that are likely to come in the near future and make your real estate purchase the closest thing to a “safe investment.” That is the main reason why I only recommend Middle Tennessee short sale and foreclosure properties to buyers. I simply cannot recommend retail priced homes and new construction to buyers that are likely to decline in value without informing them of those price decline risks.
More Control Over Your Arrangements and Lifestyle
Given all of that information, the question is “why would you want to buy a home in Middle Tennessee today?” Believe it or not, the answer is still the same – More control over your arrangements and lifestyle. If you want to experience that lifestyle control that can only come with owning a home AND you legitimately can afford to own a home (only you can really know this), again, the best option is to seek out the services of an experienced Middle Tennessee real estate expert who is knowledgeable about the buying process involved with purchasing a Middle Tennessee short sale or foreclosure / REO.
Middle Tennessee Real Estate – Middle Tennessee Short Sales, Foreclosures, Short Sale Help and Foreclosure Assistance
I help people buy real estate in Middle Tennessee and specialize in Middle Tennessee short sales, foreclosures, short sale help and foreclosure assistance (stop mortgage foreclosure).
Whether you are buying or selling real estate in middle Tennessee , my goal is to provide expert advice and exceptionally responsive customer service, utilizing the best business practices, technology and systems available. Call or send me an email so we can discuss how I can best serve your Middle Tennessee real estate needs!
Jim McCormack (Middle Tennessee Short Sales and Foreclosure Help Expert)
Direct – Preferred and text: 615.796.6898