The Price (and the Time) is Right for Buyers

"It is an amazingly good time to buy a house, and not a bad time to sell one if you are going to 'move up' -- that is, buy a house 25 or 50 percent more expensive than your current house -- because you end up catching a proportionately bigger price break on the new house than you may be giving on the old house." -- Ken Baris of Jordan Baris Realtors, "The Case for Right Pricing," by Antoinette Martin, The New York Times (registration required), Oct. 7, 2007

If the deal of a lifetime or the house of your dreams comes along, go for it. After all, it may not be available six months from now. As long as you remain in the house, any further drop in prices will be offset by once again rising prices sometime down the road. "In all likelihood, you'll make money in the long run. So your best deal could be right now." -- Bernie Markstein, senior economist, National Association of Home Builders, "Clues About When Real Estate Prices are Ready to Rebound," by Lew Sichelman, San Francisco Chronicle, Oct. 7, 2007

"It's the best time (to get into real estate). You can make great deals today that you couldn't make a year ago or two years ago." -- Donald Trump, "CNBC with Erin Burnett (video clip)," Oct. 15, 2007

Economist's Advice to His Family Members about Selling Their Home Now: Don't say you want to sell and then set the price so high that you spend the year cleaning up every morning, having people walk through your living room and look in your medicine cabinets and reject you. That's just painful -- and expensive. Mayer's research offers a simple lesson for everyone out there waiting for a high price to push them back into the black: Get real. -- Professor Christopher Mayer, Director of the Paul Milstein Center for Real Estate, Columbia Business School , A Reality Check For Home Sellers, New York Times, Economic View, Sept. 23, 2007.

What To Tell Reluctant Home Buyers Based on Interest Rate Cut The cuts reduced the target federal funding rate by a half-point, from 5.25 to 4.75 percent -- the first time in four years for a cut of that size. Tell your buyers:

1.Interest rates may not come down at the right time for you.

2.Interest rates are at near-historical lows now. The only thing that will make them go lower is a recession and nobody wants that.

3.Interest rates may not get low enough for you to buy the home you want. If you want to buy, you should buy in a range that you can get with a fixed-rate loan, unless you know you are going to sell within two to five years. If you get an adjustable rate loan, pay extra on the principal with the savings you achieve on the interest rate. That's about $25 for every 1/8 of a point between the adjustable rate and the fixed rate you could have gotten.

4.There's no guarantee that the home you want will be available at the same time as the lowest interest rate is available to you.

5.Interest rates could sink to all-time lows, making you a genius. But that doesn't mean the home you want won't cost more in the meantime.

-- Something New to Tell Your Reluctant Homebuyers, Realty Times, Sept. 21