At a recent lecture at the New York University Club, millionaire hedge fund operator John Paulson enthusiastically urged members of his audience to buy real estate--NOW! Echoing the September Forbes report, Paulson stated that “this is the best time in 50 years to buy a home,” and he maintained that securing a 30 year mortgage with record low interest rates is a wise and safe investment.

There are a number of factors which support his advice, among them los angeles real estategreatly reduced housing prices, increased negotiating power, very low interest rates, and the rapidly growing availability of Los Angeles real estate.

Those considering the purchase of a home should be forewarned, however, that lenders have tightened their requirements for qualifying for a mortgage. Generally speaking, applicants who want a 30 year fixed loan at a low interest rate must have a credit score of at least 720, a well-paying and secure job and funds for a down payment. Pre-approval for a loan is a must before making an offer on any home.

  1. PRICES:
    Prices of Los Angeles real estate are generally lower today than they have been in many, many years so it is possible to get more house for the money right now. Buyers should be prepared to occupy their homes for 5 to 10 years to see any significant gain, but most people agree that spending money on a monthly mortgage payment is far wiser than putting it towards rent. The substantial numbers of available foreclosures and short sales also provide an opportunity to buy at a reduced price.
  2. NEGOTIOATIONS:
    Because homes currently on the market are slow to move, sellers are generally willing to negotiate with a potential buyer with regard to price, financing, repairs, closing costs, occupancy time frame, etc... Buyers definitely have negotiating power right now.
  3. INTEREST RATES:
    Interest rates are currently quite low, and buying Los Angeles real estate now at these rates can result in substantial savings and/or purchasing power. For example, if you’re looking for a loan of about $400,00, each point decrease gives you $50,000 in purchasing power. Right now, with 20% down, the difference between a mortgage payment for a $425,000 home and one worth $525,00 is only $32 per month.
  4. AVAILABILITY:
    Buyers have a much wider selection now than in times past with regard to location, price, and size from which to choose and can often obtain features they have been previously unable to afford. What used to be a “dream house” may now become a reality.

So, is now the time to buy Los Angeles real estate? For many the answer is a resounding “Yes”!