Wondering how much longer you should wait to buy a home in the Vail Valley?  If you are one of the few with cash, it is anyones guess.  If you are going to borrow money, time just might be running out for you.

The Treasury has announced it is going to stop buying Mortgage Backed Securities (MBS) as of 12/31/2009 but will take what ever it takes to keep Fannie Mae and Freddie Mac afloat.  The Federal Reserve (Fed) says it will continue to buy MBS, at least through March of 2010.

Here is a question, if the Fed and the Treasury stop buying MBS, who is going to?  The rest of the world has apparently lost interest because of the way things work they do not have the ability to call a bad note, thus no security for the investment.

If no one is going to buy future MBS’s what will happen to mortgage rates?  My guess is they will rise and rise sharply, so now may be the time to make a buy while the rates are still low.

I don’t know what the future of MBS’s will be, I don’t think the pundits really know.  There is always the possibility that higher interest rates will drive prices down further.  Who knows?  My advice is, why gamble?

If you are a first time home buyer you still have the $8,000 credit working for you for a little while longer.  The market in some areas of the Vail Valley is off 40% from the high.

There are, in my opinion, great buys in the mid $300Ks out there.  I am talking 3 bd, 3 bth two car garage, less than 4 yrs old in a nice neighborhood.

How much further will the Vail Valley market drop?  How much longer before the market turns?  You guess is as good as anyone elses.

My advice, find a good realtor, find a home you like, see where the market in that neighborhood is currently then estimate where you think it will end up and make an offer now before interest rates rise and the market turns.

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