Question: We are thinking of buying a home this summer so that we can be in place for the new school semester in the fall. However, we are questioning whether buying a home is a prudent thing today.
Answer: While no one can foretell the economy, in all probability, there is no better time to consider the purchase of either an existing or new home than today. First, interest rates are about as low as they have been over the last five years, and indications are that they will not drop much. In fact, they will probably begin to climb again here in California in the near future.
Secondly, the recent overall inflation factor affecting housing has been modest at best, and there are many homes that are selling for less today than the price they would have brought two or three years ago. In fact, in certain areas, there are good buys available.
For instance, I know of a project in the Palm Desert area where 30 of the 250 units were auctioned off about four years ago. With the balloon payments on those properties coming up next year, most of these speculative units have been placed on the market, and are fetching prices that in many instances are less than what was paid at auction. There are some real values out there.
If we are not going to have increases in overall federal taxation, and there is going to be little or not decrease in the budget deficit, it would be fair to assume that in the not-too-distant future we will be faced with increased inflation or increased interest rates, or both. In either case, ownership of property with a locked-in rate of interest payment would certainly be beneficial.
Q: I noticed in going through new models of housing tracts, that vaulted ceilings seem to be very popular. Is there a particular reason for this?
A: Not really, except that these types of ceilings are certainly the "in" thing and are discussed in virtually every building magazine as something that is necessary as a selling feature, particularly to empty nesters.
I would like to point out, however, that vaulted ceilings do make rooms look larger and less compact, and I think the area of spaciousness is probably the prime consideration for this. On the other side of the coin, they can be a pain in the neck. I bought a vacation home a couple of years ago in which it will require a 30-foot ladder to remove the light bulb in the bedroom should it ever go out.
Fontaine is president of the Western Regional Master Builders Assn. and a director of the American Building Contractors Assn. He will answer questions concerning home improvements. Phone 213/653-4084 or write him at 6404 Wilshire Blvd., Suite 850, Los Angeles 90048-5510.