It is very difficult to find a silver lining in the midst of this economic disaster we are living through. Every day we turn on CNN and are bombarded by news of the pending economic doom.
But if you ask any well-off person, chances are they will tell you that money can be made during an economic downturn.
In times such as these it is important to stay calm and think clearly about how to not only survive, but also come out of this downturn stronger and more financially stable than before.
One positive aspect of this climate is the possibility for young buyers to be able to purchase their first home. During past years, South Florida’s rising prices rendered it impossible for young professionals to buy a house. Although it is sad to think that someone who is struggling had to lose their house to foreclosure, you can think of it as recycling: somebody’s loss brings an opportunity of growth to somebody else.
South Florida, being a breeding ground for foreign investors and speculators, was especially inaccessible during the economic boom, leaving no room for young families and college grads to invest in real estate.
Thanks to this downturn in our economy, however, property prices are more realistic. For example, my husband and I were able to purchase our first home for less than half the debt it had of $650,000, a price that was unattainable to us. I also helped my good friend and university valedictorian and her husband buy a foreclosed home previously purchased at $550,000 for just $240,000.
But the deals haven’t ended yet. I am currently working with a young man who just relocated to Miami after he realized how much money he had been wasting away paying rent. He is single, so we are looking at a condo in Brickell that had sold for $720,000 and is now only $160,000.
Which brings me to my next point, you don’t need to be married to buy a property. It is especially daunting for singles to buy real estate, but if you have a stable job, consider building your equity.
Right now there are many tools and incentives to help young adults purchase a home and become established:
- Mortgage interest payments are tax deductible.
- This year, thanks to our new president, yes we can… buy a house! We even have a new tax refund of $8,000 for first-time buyers.
- FHA Government Loans are a fantastic tool available for first-time buyers. These loans are available at very low interest rates and provide financing for up to 97%. of the loan amount. This means that with today’s foreclosure prices you can buy a home for pretty much the same amount you would be putting down on a rental deposit!
The combination of low interest rates, available financing, a tax refund, deductible interest payments, a struggling real estate market, and bank-owned foreclosure opportunities are factors that shouldn’t be ignored by first-time buyers. It is up to the younger, emerging generations to take charge and take advantage! When life gives us lemons… let’s buy a home!