I found an interesting quote referencing Warren Buffett’s plan to seize opportunities due to the current downturn.
“That opportunistic view of the worst housing recession in seven decades is 'classic Buffett,' said Charles Hamilton, an analyst at FTN Midwest Securities Corp. in Nashville, Tennessee.” ( Bloomberg.com September 2, 2008)
I don’t know if this is the worst housing recession in seven decades but it is a pretty significant downturn. Buffett is looking for opportunities because he realizes this down market won’t last forever. Home prices in our area have not been immune from downward pressure, but let me explain why I think there are some good home buying opportunities out there.
1) This buyer’s market won’t last forever and a bottoming out may have already occurred. I will leave forecasting the bottom to those who have more information than I do, but it feels to me like we might be pretty close now.
2) Our local and regional economies are very strong. Government is a large area employer which lends stability to the job market. We have actually added jobs in 2008. (MRIS Trends In Housing Q2 2008)
3) Interest rates are still close to historic lows which make new home loans very attractive. First time buyer programs are available now where they did not exist a few years back.
4) Home values in our area are probably lower than they should be because of drag created by economic problems in other areas of our country and across the world. Ours is an area where employment opportunities bring in more people, and people always need a place to live.
This means that taking advantage of current low prices and low interest rates is good strategy. It is a great time for first time buyers to get into the market. The lending end has tightened a little but there are lots of first time home buyer assistance programs available. Sellers are more willing to help as well. For move-up buyers it is a good time to sell and buy a larger home whose value may have fallen to a point where it is now affordable.
Warren Buffett has enjoyed a pretty successful track record. Following his example, home buyers can also take advantage of the current market to get into a home of their dreams. Years from now people will look back and say it was a great time to buy.