by Gary O'Neill

Created on: January 02, 2009

Unless you've been living in a desert cave over the past two years, you know all about the turbulence that the US real estate market has been experiencing. The focus in the news on mortgage foreclosures, bank failures and the federal program to buy troubled assets, known as TARP, have everyone wondering how the real estate market will behave in the next year, and what that means to them. The big question that a lot of people have is "Should I buy now or wait?"

The answer to that question should be the same as it was two years ago or five years ago: buy now if all the necessary elements for home ownership are in place. The fact that the current market behavior has depressed housing values can work in your favor, but that alone should not enough to push you into a decision with long term consequences. Beforedeciding to buy a house now, there are three obvious questions to answer:

* Do I really want a house? Or am I responding to what everyone else is doing? If the time to own a house is now, and if you're committed to the responsibilities of home ownership, then press on. Ifyou're reacting to the news or thinking that you should own a house simply because they're priced relatively low, wait a little while.

* Can I really afford one? Here'sthe source of much of our current trouble. Youshould only purchase a house that you can afford. Manyexperts put that amount at between 25% to 33% of your take home pay. I personally think the lower range is best, because you then have the ability to deal with other parts of your life-you're not 'housepoor.' In addition, you should not own a home unless you can afford a largedown payment. Again, many people experiencing difficulty today borrowed too much, and when either the terms of the loan or other factors in their lives changed, they were overwhelmed.

* How long will I stay in the house? Ifyou're looking for a quick buck, this isn't the place to start right now. If you're looking for a place to live and become part of a neighborhood and community, then buying now, assuming the above questions are answered, is a good idea.

* Will I be able to afford some repairs or changes without going into debt? Many houses are 'perfect' 'll be you move in, requiring no major changes before moving in. Quite often, after you've moved in and begun to really experience the house, you notice that something isn't just right-so you start planning a new kitchen, a deck or some other major project. If you can make the changes without going into debt, this could be a great idea, and you'll be ready for home ownership that can be a positive thing in your life.

Owning a home can be a wonderful thing. Makingthe wrong decisions so that the home owns you is not. If you can truly afford to own a home, and if you are ready to own and manage a home, not an asset, then this is a great time to buy a house.

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