Long Island Real Estate Market: Why Should I Buy A Home?

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I’ve been working with many prospective buyers in the Long Island real estate market and one question I have to answer is, “Why should I buy a home?” And I’d like to add to this the word “now” at the end of it. But I want to point out the main reasons why home ownership is a good thing.

In this day and age of online trading and infomercials about overnight real estate riches, one thing I believe many buyers are focusing entirely too much on is the investment side of their prospective purchase. When our parents purchased homes, buying the home wasn’t based on “comps” or how much Return On Investment they’d get down the road. Buying a home was about living somewhere and owning a piece of property where a family could grow up.

Fannie Mae’s National Housing Survey for 2010 focused on major reasons for buying a home. The results, in my opinion, were very accurate and represented that many prospective buyers “get it” when it comes to the value of home ownership.

Eighty percent of respondents sited raising children and educating them was a major reason for owning a home.

Seventy-nine percent of prospective buyers noted that family safety was another major reason for owning a home.

And the third most noted reason for buying a home was having your own space and doing what you want to it, in it and on it! Owning land and a home that is yours is special. Indeed, being a home owner is special.

As a homeowner, you’re able to raise your family and help educate them in the safety of your walls on your land and you have the freedom to live the way you want in your home. These are the best reasons for home ownership.

Now I also mentioned why now is so important. Well according to the National Association of Realtors and Credit Suisse estimates, homes are more affordable now then they have been in the last 30 years.

Specifically, this graph above demonstrates that the median household income needed to pay the mortgage on a median priced home is about 15% of total income. That means for every dollar earned in a household, only .15 cents goes toward paying the mortgage. Now of course, Long Island represents higher prices and higher taxes.

I’d guess that the median income needed on Long Island, to pay the mortgage on a median priced home is more toward 30%. A median priced home on Long Island is about $355,000 where the national average is $166,000 and then adjustments have to be made for income where the national average is about $48,000 and Long Island is around $77,000.

The bottom line message here for buyers looking to own a home within the next several months is remember to keep your eye on the prize. It’s not all about what the home will be worth in five years and what your return on investment will be. It’s mainly about owning your own home and raising a healthy family in an environment where you call the shots. So paint those walls bright lime and put in those 15 hi hats in the dining room. It’s all yours…or it can be (and should be) very soon!

If you have any questions about how to purchase your first home, please feel free to call me for a free private consultation at (631)831-9048.

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