Buy a House: Brave Homebuyers Ignore the Slump

buy a houseGlenn Ruppert recently got up the nerve to buy a house within Firethorne, a 1,400-acre planned community in Katy/Fulshear, Tex. -- right in the middle of the ongoing housing slump.

The Ruppert family, pictured left weren't actually looking to buy a house. But government incentives such as federal tax credits and government-funded down payment assistant programs made buying a logical and attractive investment. The Rupperts were also drawn to being part of a new neighborhood with a lot of growth potential.

"We waited a year during the economic downturn for things to level off. We hadn't counted on the government stimulus, but that was an incentive," says Ruppert. "[So] we were able to buy our first brand-new home, a 4,380-square-foot home, [and move] up from a 2,500-square-foot home."

Talking real estate may be the pits for homeowners who tragically bought five years ago, but it's ever the hot topic for new homeowners who are not only unfazed by the slump, but eager to drop dough on still-discounted deals.

According to a Fannie Mae survey, 51 percent of homeowners and renters say the housing crisis hasn't affected their desire to buy. Roughly 27 percent indicate that the sad state of the market had some influence on their decision to by now. Why? Good prices!

"People will always need a place to live," says Jessie Conners, a real estate expert specializing in

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REO and short sales, and who starred on season one of Donald Trump's The Apprentice on NBC. "Real Estate, unlike a fad or get-rich-quick scheme, is a tangible investment. [Right now] banks are holding too much inventory and they are desperate to get them off their books. They are not in the real estate business, and they are being fined by the FDIC."

For Alex Varvounis, a Washington, DC police officer, who recently bought a home in Spencerville, Maryland this isn't a housing crisis, but a window of opportunity he hopes stays wide open for a while.

"It's where things should be in reference to cost and value," says Varvounis. "When I was in college I could not even afford a condo, much less the house I bought last year. My interest rate is 4.375 percent, [and] the interest rate makes all the difference in a 30-year mortgage. Everyone is lowballing the foreclosures, offering what is asked. Twenty percent down ups your chances of getting the house, and then you have [nearly] no mortgage coverage to worry about.

Many new homeowners feel personally untroubled by the current crisis. Where a significant number of Americans overextended themselves financially and made poor investment decisions without real savings, others who waited until they were a bit more stable and grew their nest egg are now delightfully cashing in.

"After college I moved back home and paid off my student loans," says Varvounis. "When I had money to burn, I thought of a solid investment, a house. I tried the market three years ago and was out-gunned. The 7-plus percent interest rate was what made it hard. So I am glad it all went downhill. Average guys couldn't touch real estate then, now we can!"

Resale value was a detail many buyers of a few years ago overlooked. They were quick to get loans and get in, and deferred payment until the market imploded. Now "resale value" is common jargon dropped by both the broker and the buyer.

"You always need to think of your exit plan when investing," says Conners. "I mainly buy and rent because the rental market is so strong."

"[For me,] I do not see resale as an option," says Varvounis. I am looking at paying my house off in 7-10 years. I look at how many houses I can buy, and pay off before I retire. If you own and need money you can always rent it and buy another."

"Look, you have to live somewhere and in the long run home prices will go up," says Samuel Gailbreath, a home mortgage consultant at Monarch Bank in Rockville, Maryland. "And ten years from now people will look back and say 2010 and 2011 were the times to buy real estate."

"[It is] the American dream that people strive for," says Glenn Ruppert of homeownership. "Regardless of the economic outlook, we're still going to take care of our family to the best of our abilities. You always have to be forward thinking. Nothing has historically shown that this type of thing lasts in this country."

For more on home prices and related topics see these AOL Real Estateguides:
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