- The Washington Times - Thursday, November 18, 2010

It’s a good time to buy a home. I know Realtors are relentlessly optimistic, so they always will tell you it is a good time to buy. And they’re typically correct, simply because buying is better than renting for many people.

Now, however, is a good time for other reasons. I’ll give you four arguments why it makes sense to buy a home in the Washington region this winter:

  • Inflation is coming. The “quantitative easing” recently announced by the Federal Reserve - which is really just the printing of money out of nowhere - almost certainly is going to result in significant inflation in the coming years. During an inflationary period, real assets are the safest investment. That’s why the price of gold already has climbed so high.
  • It’s a good time to buy because others are not. Competition from other buyers is low right now. Just 6,518 existing homes were sold in October, a 22 percent drop from October 2009. Plus, November and December are the slowest sales months of any year. So buyers today face lower levels of competition, and should be able to negotiate a little harder with sellers.
  • There are plenty of homes from which to choose. Although there were just 6,518 sales in October, an additional 9,171 homes were added to the region’s inventory, which now stands at 37,000 homes.
  • Interest rates make homes more affordable today. Not only have home prices fallen since their 2005 peak, interest rates are lower than they have been in a very long time. Taken together, the current low prices and low interest rates make housing more affordable than it has been in decades.

All of these are reasons to buy a home to live in. On top of that, broader economic changes such as inflation may cause more investors to shift into real estate in coming years. If that happens, it could further support and even increase the value of Washington-area housing.

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The statistics in this story reflect a metropolitan area that includes the Maryland counties of Montgomery, Prince George’s, Anne Arundel, Howard, Charles and Frederick; the Virginia counties of Arlington, Fairfax, Loudoun, Prince William, Spotsylvania and Stafford; the city of Alexandria; and the District.

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