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Seven tips for the first-time homebuyer in today’s market

Spotlight on Finance

— The real estate industry has been much maligned in recent years. That’s not breaking news. In fact, even real estate tycoon Mortimer Zuckerman has lamented the current state of the housing market, stating that “the most critical factor subduing the demand for housing is that home ownership is no longer seen as the great, long-term buildup in equity value it once was.”

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Joel Bisaillon, vice president and district sales manager, KeyBank Mortgage, for Key’s Capital Region

There is obviously truth in Zuckerman’s assessment. The early 2000s represented a huge housing bubble, and that bubble collapsed. However, the idea that home ownership no longer provides equity value is shortsighted. In fact, there is no reason to think that as the market corrects—and it will—that property ownership will not once again become a valued investment. And for first-time homebuyers, there may be no better opportunity to buy than now.

Maximizing value is a matter of timing

For all the talk of upside-down mortgages, rising taxes and declining values, it’s surprising that so few people are talking about the number one rule of investing: buy low, sell high.

It’s true that predicting the bottom of a market is a shaky proposition at best. But whether or not the current trend of housing prices finally increasing in value continues or if the industry experiences another dip—both impossible to forecast—this much is true: inventory exceeds demand and interest rates remain near historic lows. It is, quite simply, a buyer’s market.

“the most critical factor subduing the demand for housing is that home ownership is no longer seen as the great, long-term buildup in equity value it once was.”

So what does this mean for the first-time homebuyer? It means you can buy a great house at a great price for less money. It also means that if you plan on staying in your house for the foreseeable future, you will build valuable equity.

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