"It's a scarey market. Shouldn't I wait before buying?"

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Timing a market is more a matter of luck than skill. In fact, you can't know a market has hit bottom until it is already on the rise. If you are on the fence, waiting for the 'right time' to make your move, consider these points...

"Nobody is buying right now"

The National Association of Realtors® reports that 2007 was the fifth-best year of sales in U.S. history. Yet, if you ask just about anyone, they'll tell you it was the worst year ever. It is true that there are many homes on the market and many sellers are under financial duress. The competition to sell theses homes tends to drive prices down but there are also buyers out there who are looking for the best deals and scooping them up. Mortgage rates are still very low and I expect the pent-up demand for good buys to keep sales churning at the same level as 2007...or better.

"Home prices are going down...we should wait"

John D. Rockefeller once said that the way to make money was to buy when "blood is running in the streets!" JD was speaking, of course, about the idea that you should buy when everyone else is running away. While no one has a crystal ball, history tells us that the real estate market tends to follow a cycle of rising prices, stability, lowering prices, stability, and then a return to rising prices again. The Florida Association of Realtors (FAR) statistics show that, over the past year, there was an overall 5 percent decline in home prices and a 3 percent decrease in condo prices. These are not precipitous drops! If the market stabilizes over the next year as many economists predict, any reduction of market value you may see in the near term will probably be reversed if you stay in your home 3-5 years.

The other consideration is that interest rates are likely to go up again, particularly for the same reason that will cause home prices to stabilize. it is entirely possible that anything you might gain by waiting for a lower price may be offset by higher interest rates and correspondingly higher monthly payments. And, even if you were to realize some small gain by waiting, you will have spent that time in a place you don't want to be. If you are a renter, you'll also being paying off someone else's mortgage during the time you could have been paying off your own!

"Renting makes more sense for us now"

If you plan to stay in your home for more than two or three years, the key benefits of home ownership can make buying a better deal. The key benefits include annual tax benefits and appreciating value as you both paydown the mortgage and the market (eventually) goes up. Owning a home is a great way to build wealth. In fact, the most recent Federal Reserve Survey of Consumer Finances shows the median net wealth of a homeowner household is $171,700 compared with just $4,800 for a renter household.

"Home prices aren't going to rise much since prices are already high"

People always think the prices they pay for many things are high but those same prices seem low to us when we look back on them years later. In fact, I still hear people comment that their first home cost them less money than they can buy a car for now! From 1995 to 2005, home prices rose 88 percent nationally. Historically, home prices tend to rise 1.5 to 2 percent faster than the rate of inflation. In Florida, the median sales price for existing single-family homes in November 2007 was 52.5 percent higher than the median price for homes in November 2002, according to FAR records. If you look at history, there's almost never been a time when people couldn't scare themselves into taking a "wait and see" approach on purchasing a house. Despite these worries, most homebuyers have done OK for themselves and, in fact, their homes have turned out to be their greatest wealth asset. Our area did see a time of irrational exuberance a few years ago and many speculators jumped in driving prices up even further. Some of those people did get hurt but the market had to self-correct eventually and, in fact, that is what it is doing now. Prices are about even with the prices we had in 2004 before the crazyness got out of hand. If waiting was a good idea, the payoff time has now arrived.