With all the talk of the economy improving, it’s pretty easy to get swept up in optimism. But despite improvements, the numbers still aren’t that great. In April, unemployment numbers fell to a three year low of 8.1 percent, but that’s only because less people are actively seeking work. (The government only counts those who are actively looking as the “unemployed” figure.)
According to recent data, there are 12.5 million Americans out of work which is the longest period of high unemployment in the U.S. since the Great Depression.
So, if you’re fortunate enough to have a good job in this economy and have cash to spare, then you might be asking yourself if it’s the right time purchase a home. If the answer is yes, then you may want to consider New York City, because of its unique position as a financial capital.
To help you decide, here are some more questions to ask yourself: Do I know how to keep my expenses down? Am I more comfortable keeping cash on-hand versus investing it? Would I prefer having my money in the stock market? Or do I want to diversify by having cash, money in the markets and own real estate? Of course, these are questions only you can answer.
But, if you aren’t clear, here is some information about the current NYC housing market that can help you decide:
Real estate can be an amazing appreciating asset which you can both live in as well as get deductions on. And if you have a strong knowledge base about the market or have a skilled real estate agent who can guide you, you should be able to make money purchasing a home, especially if you are willing to hold on to your investment for two or more years and, even more so, if you buy in New York City.
Because the city draws investors from all around the globe, there are more people buying homes in NYC than ever before, unlike practically any other time in history.
The adage still holds true: If you’re going to buy, think location. But you still need to determine what part you want in real estate, investment and/or cash. Owning NYC real estate — especially today with the prices being flat and interest rates being historically low—is one of the most solid investments you can make.
Even factoring in new development, the total listing inventory coming on the market is not even close to what it was from 2005 through 2008.
Since its peak in 2008, new development has been depressed, and though some developers have started to swing into action, inventory will, most likely, continue to stay low for at least a few years, since many projects have only recently gotten underway.
So, when the market does take off in New York City, it’s really going to go! Thus, if you stick to what you know or know someone who can really educate you in making the right real estate decision, you will be in a great position.
Also, don’t just follow the packs regarding what’s hot, that’s where people get into trouble.
Further, be sure to put enough cash down and have a good understanding of your finances to know what you can really afford on a monthly basis; avoid over-leveraging yourself at all costs. In addition, look at the comparables before you buy so that when and if you decide to purchase a home, you will have made the smartest investment possible.