LOS ANGELES--Hispanics are expected to drive the first-time homebuyer market in the coming decade. They will represent as much as 40 percent of all new homeowners, according to the Harvard Joint Center for Housing Studies. Accordingly, now is an excellent time to address a difficult question: "Is now a good time to buy a house?"
Amid worries that the single-family housing market is still artificially inflated, it can be difficult to imagine affording those high price tags. Further, conventional wisdom may give pause to first-time home buyers, in light of the recent mortgage industry turmoil.
Many real estate industry insiders, however, are seeing opportunities.
According to Mario Avendano, a Los Angeles County-based realtor, this is "a great time for first-time buyers to purchase a single-family residence--to live in it, and make it their investment and home."
An overstock in the number of properties that are currently listed in the greater Los Angeles area gives buyers a ripe opportunity to negotiate with sellers and lenders for a better price.
"Property owners didn't want to lower their prices because they were set on making a significant profit from the sale of their homes," says Chris Mann, a partner in the Rotkin Real Estate Group. "Finally we're starting to see sellers drop their prices, and it's breaking the stalemate in the residential and commercial real estate markets."
But available property is not enough. Buyers, especially in light of the current credit crunch, have to be financially qualified. Fledgling purchasers need to provide extensive documentation of a reliable income and good credit.
"People who have the means to make a down payment on a house, and the ability to make a monthly payment, will benefit from the climate right now," says Avendano.
This could be the time to take the risk. The June 2008 median price of a home in Los Angeles County was $415,000, a 23.9 percent drop since June 2007, according to DataQuick.
Of course, not everyone has the means, especially through conventional routes. Join us next week for part two, where we'll give details on special government programs for first-time homebuyers.
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