Don't expect to make a killing in real estate

Women & money

April 10, 1991|By Karen Lazarovic

Q.I am wondering if now is a good time to buy a house. I know prices are down quite a bit from last year and sellers are anxious.

A. If you are looking for a place to live, buying a home instead of renting usually is the better choice. Home ownership is one of the last remaining tax shelters for individuals in that mortgage interest and real estate taxes are tax-deductible.

If you are looking to make a big score in real estate investment, I would be cautious before jumping in. The huge, double-digit annual appreciation that real estate enjoyed in the past 15 years is unlikely to occur again in the near future. There is a general oversupply of homes for sale and a shortage of demand. It may take many years for this downside of the real estate cycle to complete.

I would recommend buying a home to live in only if you are planning to stay put for a number of years. If you are thinking of buying and then selling within two to three years, you will probably not recover your closing costs, which can run into thousands of dollars depending of the cost of your home.

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