A Slowdown Won't End
The Real-Estate Boom
Question: I'm thinking about buying a single-family home relatively close to Atlanta for between $250,000 and $270,000. I plan to stay in the house for five to seven years. Some people are saying that the slowing economy will lead to a recession and a sharp decline in real-estate prices. I know that nobody can predict what will happen five to seven years down the road, but I'd like to know what you think about the future of the real-estate market. Also, are there any disadvantages to buying a 17-year-old house?
Suja: It's true that no one can predict the future, but the current trends in real estate are strong and are likely to continue that way for some time to come. Remember that the last real-estate recession -- which lasted until 1998 in many parts of the country -- is only a few years behind us. Real-estate boom periods often last as long as five to 10 years. Further, during the last real-estate recession, new-home construction slowed considerably, meaning that there still is some pent-up demand in many areas. This translates into quicker sales at higher prices. Finally, today's relatively low interest rates mean that more buyers are able to qualify for a purchase. This, too, results in increased demand. In short, the market looks very strong for many years to come. Besides, some economists are speculating that the recession could be exceedingly short-lived or may already be over.
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To answer your second question, there's nothing wrong with buying a 17-year-old house, as long as you get a good professional inspection. Some things may be nearing the end of their normal life span -- such as the water heater and air conditioner -- and may need to be replaced in the near future. But overall, if the house is in good shape, it should deliver good service for many years to come.
Mr. Irwin has more than 25 years' experience as a Los Angeles-area real-estate broker. He is the author of more than two dozen books about real estate and is recognized as one of the most knowledgeable writers in the real-estate field. Mr. Irwin's most recent book is "Buy Your First Home," (Dearborn, 2000).
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Suja, Atlanta
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