BUY A HOME!

With all the financial chaos existing in the United States today, a thought occurs to me that is actually quite simple.  Want to stimulate the economy...buy a home.  Now how could that possibly make a difference with the Government taking control of Fannie Mae and Freddie Mac?  AIG being bailed out by the Fed, etc, etc, etc?  It is quite simple.  In fact, the DOW has dropped again today even with the bail out of AIG.  But, the purchase of a home does several things.

Think about this for a moment while you read this.  If one person were to purchase 1 home it would look something like this.  A mortgage is born, which means interest earned by the bank.  Which means more money for lending.  A lender is paid. A Realtor is paid.  A home inspector is paid.  A title company is paid, a closing agent is paid, and an appraiser is paid.  Staff people in each of these entities are paid.  Guess what, these folks will spend money buying consumer goods if they are paid. 

A seller is cashed out and can now go buy a new home ( which starts the cycle over again ).  The new buyer may need to make some additional purchases for their new home.  At least if it was my wife...we would probably need new towels, dishes, matching soap holders, garden hoses, flowers...whatever.  The point is, other purchases would be made.  And, a buyer has a new home...a sound investment that provides tax benefits, a roof over their heads and a place to create memories.

What if the home is new construction?  There is even more trickle down effect.  Framers, painters, electricians, flooring installers, landscapers, plumbers, dry wallers, etc. all getting paid...all turning around and spending.

Now, if this were to happen not just once but several times across the US..think of the impact.  In fact, in 2008 it has happened 431 times per month in Spokane ( see my previous blogs for market updates ). And while this is not the same average we have been used to over the last few years...IT IS GOOD.  Real Estate is GOOD for the economy.  In fact, I just read an article on cnnmoney.com that says housing will help correct our current economic state.  "Our economy and our markets will not recover until the bulk of this housing correction is behind us." ~ Henry Paulsen Treasury Secretary

I understand that buyers may be worried about the economic market conditions.  And maybe even concerned about what may happen next week.  But, consider this...the average sales price in Spokane has only slipped 1.8% from last year at this time.  That being said, I am stunned by the number of "good buys" out there.  We tour new homes on the market every week and I've seen some great opportunities out there.  There are more homes available to first time buyers than I've seen in years.  There are over 1,500 homes for sale in Spokane, right now, between $100,000 and $200,000.  A couple of years ago we struggled to find homes for buyers in that price range.  Buying a home in Spokane is a good financial decision.  Buying a home in Spokane will help stimulate several other businesses.

If you are ready to stimulate the economy please take note of the following tips:

   1.   CHOOSE A GOOD LENDER.  We are seeing purchases falling apart at the last minute in situations where the buyer has used an "internet" lender or a lending institution that is not very credible or well known.  Consider Windermere Mortgage who GUARANTEES your closing for example.

   2.   HIRE A REALTOR.  Buyers agents are here to help you.  Their job is not to just find your new home.  They are in your corner to represent you and help you negotiate your purchase.  They can help you find a good lender; they can help you navigate through the home inspection process.  They help you sort through the inventory and find the right home for you.

   3.   CONSIDER BUYING NOW.  Interest rates are great.  You have a wide selection of homes to choose from.  You may be able to negotiate to have the seller pay your closing costs.  Customer service from all entities in the real estate transaction is going to be excellent.  There are agents, lenders, title officers, closers and appraisers who are ready to help.