Thursday, February 19, 2009

Now is the time to buy a house

Now is the time to buy a house

The Desert Sun • February 19, 2009

The median price for houses has dropped to a low not seen since 2001

This is good news for potential Coachella Valley homebuyers.

The median price of a house in the desert dropped 47 percent in December to $194,900. The median price hasn't been this low since 2001, following the Sept. 11 terrorist attacks.

Many Realtors say now is the time to buy. Sales in December 2008 were up by 8.3 percent over the same time in 2007, so homebuyers shouldn't wait too long.

Those who have stable jobs and can buy should. Home purchases stimulate the economy. Buying an affordable house leads to other purchases, including furniture, landscaping and a number of services, which provide jobs. The valley needs jobs.

But homebuyers must be realistic about their purchases. Loans must be reasonable, possibly with fixed rates, and made to people who qualify and offer proof that they can pay back a mortgage.

It sounds simple, but such seemingly obvious steps were not taken before. Subprime lending, loans made with adjustable rates to people considered risky borrowers, created the housing crisis — one of the chief reasons this economy has soured.

And while the drop in prices means houses are within reach of more buyers, word has been circulating that banks are keeping a tighter grip on the purse strings. But that's not completely true.

“If you qualify and have a down payment and steady income, you can” buy a house, said Bill Powers, president of Pacific Western Bank's desert region branches. “Others are waiting, but you can't time the bottom, and I think we're close to it, so if you can, you should buy now.”

Meanwhile, a number of lenders are holding off on foreclosing on more properties. Waiting on President Barack Obama's $75 billion plan to prevent more foreclosures, several major banks and government-controlled mortgage finance companies have halted foreclosure procedures until next month. The plan, announced Wednesday, will help homeowners refinance their mortgages.

Nationwide, more than 2.3 million homeowners faced foreclosure last year. That was an 81 percent increase over 2007. Some economists say foreclosures can reach 10 million.

But plenty of foreclosed properties remain on the market.

Again, those who can afford a house, should buy now, and those who can lend the money should also do so now. The valley's economy depends on it.