Press Release

Buying a Home Offers Many Happy Returns

MORRIS PLAINS, N.J., – Most financial experts agree that the worst of the economic volatility is likely behind us.  As a result, Americans who were fortunate enough to weather the storm and remain confidently employed might now be looking for some favorable, long-term investment opportunities. 

Yet, many would-be investors uneasy with having to stomach the ups and downs of an unpredictable stock market again might be interested in a more reliable, steady option.

If history is any indicator, perhaps the best decision those investors can make at the moment would be to purchase a home.

“Many times when prices have been low, interest rates have been high and vice versa,” said James M Weichert, president and founder of Weichert, Realtors, one of the nation’s largest independently owned real estate companies. “With both prices and rates at near optimal levels, now is when investing in real estate really pays off.”

Since the 1940s, home prices have risen an average of 4 percent a year.  On first glance, that might give the impression that real estate provides a very mediocre return.  However, when you consider that most buyers only put down a small percentage of the home’s total cost, you quickly realize the return is much greater.  For example, a buyer who pays 20 percent down still gets to enjoy all of the appreciation. That turns a 4 percent increase in home prices to a 20 percent yield on the money actually invested by the buyer.

Purchasing real estate now can be an attractive option for many individuals.  Those who buy a home for the first time will receive an $8,000 tax credit and can begin to see a return on the money they were previously paying for rent. Existing homeowners can take advantage of low rates and affordable prices to trade-up to a larger home while getting more house for their dollar than in recent years.  Repeat buyers who purchase a home may also qualify for a $6,500 tax credit of their own.

Current conditions also offer a great opportunity for those interesting in purchasing a vacation property or second home.  Surprisingly, the number of individuals that own multiple homes is higher than you might think. According to the National Association of Realtors, 15 percent of buyers in 2009 owned two or more homes.

“Today’s market gives individuals a chance to enjoy some of the lifestyle perks associated with owning real estate that they might not otherwise be able to afford.  This might be the only time they can move to the more prestigious neighborhood, trade up to the larger home or get that cabin by the lake they always wanted,” added Weichert.

Even for those who have no intention of using the home personally, buying real estate now should prove to be a wise financial decision.  The current market offers a great opportunity for those thinking about purchasing income and investment properties - particularly if they plan on holding onto the property for several years.  In fact, many of the professional real estate “flippers” who had been sitting on the sidelines the last few years are buying again because they envision prices and interest rates going up from here.

Investors who acquire real estate at today’s low prices should be well positioned to sell for a profit when the market rebounds. According to the National Association of Realtors, home sales are projected to rise to about 5.6 million in 2010, an 8.5 percent increase over 2009. This increase in sales should help continue to stabilize the real estate market and begin to provide a return to buyers in home price appreciation.

Even with real estate’s proven track record of financial returns, perhaps the best reasons to buy now are the personal benefits associated with home ownership that you just can’t get from other investments.

“Many Americans successfully fund their retirement in large part through the equity they earned by owning a home over the years. Why not use that same investment practice for other purposes?  Instead of buying mutual funds which are just paper until you cash them out, buy a vacation property that you can enjoy for 10 or 15 years and then sell when it comes time to finance your child’s college education. Not only will you have a place to build great family memories, you’ll also see a healthy financial return,” said Weichert.

Weichert has nearly 18,000 sales associates in approximately 500 company-owned and franchised sales offices in key markets throughout the U.S.  A family of full-service real estate and financial services companies, Weichert helps customers buy and sell both residential and commercial real estate, and streamlines the delivery of mortgages and home and title insurance.  For more information, Weichert's customer service center can be reached at 1-800-USA-SOLD or at Weichert's Web site, www.weichert.com.  Each Weichert franchised office is independently owned and operated.

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