I am a big fan of NPR (National Public Radio), and they usually have great guests on there. Host Guy Raz talks to Karl Case, a professor of economics at Wellesley College and inventor of the Case-Shiller housing price index, about whether it's a good idea to buy a house in the current real estate market.I know you are thinking, I don't have time to read that...sooooo...here's some key excerpts for the busy folks.
RAZ: So is it a good time to buy now, in your view?
Prof. CASE: Well, it certainly is the best time we've seen in the last four, five years, and maybe in my lifetime (I bet this dude is old also). And if you look at some of the property values that are out there, one of the things that people forget is that a house is a consumer durable good. It's not just an investment.
RAZ: Now for decades, Karl Case, you know, homebuyers were told to spend a bit more than they could afford. Buying a home was the safest investment you could make. Will that advice, in your view, still be valid?
Prof. CASE: Well, I don't think it was ever valid, but I don't think it will be valid in the future. You buy something you can afford and you can make the payments whether you, you know, to promise to pay. You want to look forward with a realistic outlook and take on payments that your income can handle.
My thoughts : I think it is pretty cut and dry. This is a great time to be buying a house, people are (sadly) being forced to sell in some cases cheaper than what they bought for. However, that doesn't mean you should feel bad buying it at a great price! Also, note my underlined sentence up there, before people were taking the advice to spend a little more because in the long run it would payoff, Prof. Case points out, don't bite off more than you can chew.
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