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Now's the "Absolute Best Time" to Buy a Home: Coldwell Banker CEO

Posted Jun 23, 2010 02:30pm EDT by Peter Gorenstein in Investing, Housing
Related: XHB,, tol, len, phm, dhi, low, hd

The housing market weakened again in May. New-home sales plummeted 33% to a record low, and existing-home sales fell 2.2%.

That's certainly bad news for home sellers, but it's not the case for home buyers, says Jim Gillespie, CEO of Coldwell Banker. "This the absolute best time that I've ever seen to purchase a home," he tells Aaron.

Gillespie says it's such a strong buyer's market for three reasons:

* Low Rates. Interest rates on 30-year fixed mortgages remain near historic lows, around 4.75%.

* Inventories are high. Buyers can expect plenty of supply to meet their demands. The government estimates it will take more than eight months to burn off the excess inventory, up from about six month in April. Six months is considered the norm.

* Prices. "Prices have finally stabilized in most of the country," says Gillespie.  The median U.S. home price is near an eight-year low and down 29% from the peak in July 2006. Though every market is local, Gillespie believes any further drop in prices will be skewed by distressed sales.

Gillespie also points out that the homebuyer tax credit is also a factor to consider.  Home buyers have until June 30 to close a deal, but the Senate may vote to push that deadline back to Sept. 30. And, if you miss that opportunity, Coldwell Banker is sponsoring a similar incentive called the Buyer Bonus Sales Event, which offers buyers 3%, or up to $8,000 on any purchase.

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