Why now is the time to buy a home?

Many people have questions about today’s housing market - especially first-time homebuyers navigating their first purchase in the midst of conflicting news about market conditions.

Is it a good time to get in? How does the national housing market affect us locally? What does the current uncertainty about property taxes mean, now and down the road?

Consumers contemplating a new home purchase can look forward to 2008 with great hope: This is an excellent time to take advantage of market conditions that are ripe for buyers. Home inventories are up, giving buyers lots of options, and mortgage rates are low, with traditional money readily available for most consumers.

Worrying about how the national housing market affects the local market is a natural reaction for buyers trying to sort out the sometimes-gloomy national forecast. But as Lawrence Yun, chief economist for the National Association of REALTORS has often said, “A national picture of the real estate market is just about as valuable as giving a national high temperature for the day.”

While the overall picture is important, buyers and sellers in central Indiana are better positioned than many of their counterparts across the country. Central Indiana was spared the major price corrections and severe oversaturation of housing supply that plagued the rest of the nation in 2007. And while predicting the overall level of activity in 2008 is difficult, buyers - particularly those entering the housing market for the first time - can feel confident about a home purchase for several reasons.

Central Indiana’s status as an affordable market is a plus for any first-time buyer. The National Association of Home Builders/Wells Fargo Housing Opportunity Index named Indianapolis the most affordable major market for the ninth consecutive time. Some national media reports have touted the anticipated strength of central Indiana’s market in the coming years, and national market watchers also have their eyes on central Indiana.A Nov. 7 Fortune Magazine article listed Indianapolis as one of only seven cities expected to see home values increase in the next five years. The magazine studied the correlation between property values and rent rates, typically a reliable guide to the value of homes to determine whether an increase was likely. Indianapolis was one of more than 50 cities studied.

CNN Money.com noted that Indianapolis’ local economy is poised to grow faster than the national average over the next two years, with house prices projected to post a respectable gain. It pointed to Indianapolis’ low unemployment rate and stable employment sectors such as professional and business services, health care, education and government.

“Indianapolis is riding a few trend that are bringing about an early recovery in its real estate market,” it said.

Many factors - such as good schools, access to transportation, parks and recreation, and public safety - contribute to overall quality of life and, ultimately, the success of the housing market. But affordability is the cornerstone of central Indiana’s housing market - for 2008 and beyond.