A client of mine sent me the following link which I thought was really helpful so I am passing it along to all of you.  http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=1&oref=slogin#  I frequently get asked the question whether someone should rent or buy.  Clearly buying is not for everyone (are you shocked that a Realtor is saying buying isn’t for everyone?) so when making the decision, think carefully about your individual situation and speak with a professional about your options.

That same helpful client also drew my attention to this article http://www.nytimes.com/2008/05/28/business/28leonhardt.html?ref=business.  For all you “evangelist renters” out there (credit given to the author of the article David Leonhardt for that term) you might consider a review of your finances and situation about 6 months before your lease expires.  We would of course be happy to talk to you about that.

Credit for this blog is given to GCAAR.  www.gcaar.com

Fannie Mae will no longer require borrowers to put up an extra 5% down payment when purchasing homes in areas deemed “declining markets.” Fannie Mae had been hearing concerns from REALTORS® and others for months that the policy was bad for housing because it discouraged consumers from buying in markets hardest-hit by foreclosures. NAR met several times this spring with Fannie Mae officials and sent letters reflecting members’ unease with the policy. Under the policy change, borrowers can get loans up to 95% loan-to-value, even in markets in which prices have been falling. Prior to the change, borrowers could only get loans up to 90% to give lenders a 5-percentage-point cushion to protect against possible price declines in the future.

The new policy takes effect June 1, and Freddie Mac has said it will also scrap this policy

With all the media attention on the so-called credit crunch, it sounds like there are no mortgages available unless you have perfect credit, a 20% down-payment, and helped a little old lady across the street this morning. Not so – FHA to the rescue!

The Federal Housing Administration is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934.  FHA loans had fallen out of favor over the past few years as people chose sub-prime mortgages with low teaser rates and little documentation, but currently one out of every five mortgages is FHA insured.

Do you need 20% down?  The great news is that FHA only requires 3 percent down. 3 percent!  And that 3 percent can come in the form of a gift or grant.  FHA borrowers only need to have $500 in a transaction.  All the while, FHA mortgage rates are as good or better than their conventional counterparts.

Low or no down payment, extremely competitive rates and easier qualifying, no wonder FHA is moving up the charts!

Perhaps the biggest question in buyers and sellers minds is – should I make a move now or am I doing so at the wrong point in the cycle? To answer this question, we need to look at market cycles better and understand how they work. Take a look at this graph which represents markets over time.

The two diagonal straight lines represent the top and bottom of what I like to call the “safe zone”. The curvy line represents the cyclical peaks and valleys within the market as a whole. The space above the top line of the safe zone, yet below the curve line is the place I like to call the “unlucky buyer zone “(or the very lucky seller zone). This is when the market is the most expensive, and it is right before a correction. If you look below the bottom line of the safe zone to the space above the curved line, you’ll find the “buyer’s lucky zone”, (or the seller’s unlucky zone). All the rest of the space is the safe zone. What this means is there are only very small periods of time when it is really a bad time to buy (right at the peak before a correction) or to sell (right at the bottom, before an upswing). The vast amount of time you’re safe to make a move. Statistically speaking, chances of you buying or selling in the safe zone are far, far greater than buying or selling in the other zones.

You can’t time real estate so waiting for the right moment in the market to make a move doesn’t make sense. When was the last time you “timed” anything intelligently? Did you “time” your career move to be ideal? Did you “time” your marriage or commitment ceremony to be on the day without rain? Did you “time” that stock sale to sell right before the company announced a gigantic loss - intelligently? Most likely not – and you cannot “time” the real estate market either. The period of time of ideal buys and sells are simply too small, and impossible to determine until about 6 months after they have occurred.

Therefore, buy or sell when the market is in the safe zone – and pay no attention to the top or the bottom. It is foolish to rely on luck as a strategy.

One thing is for certain, the market is moving… are you?