If we share it … You can BELIEVE it!

If HE Says It Is Time To Buy a Home, BUY A HOME!

“If you don’t own a home, buy one. If you own one home, buy another one. And if you own two homes, buy a third and lend your relatives the money to buy one.” – John Paulson 9/27/2010

Now that is not something you have heard from a credible source in a long time. That is a very powerful statement. And why should you listen? John Paulson made a fortune legally betting against the lenders when the lenders were making bad loan after bad loan. The experts all agree that John Paulson is a bull when it comes to residential real estate right now.

Who is John Paulson?

It has been said that Paulson is the person who made a fortune betting that the subprime mortgage mess would cause the the real estate market to collapse. He understands how the housing market works and knows when to buy and when to sell. We like to think of him as sort of a moral compass regarding the housing market. When fraud and waste were rampant on Wall Street and Main Street, Paulson deduced that their actions would blow up and he bet against them. In a recent article in Forbes magazine John Paulson was partially described: a multibillionaire hedge fund operator and the investment genius who made a killing going short subprime mortgages a few years ago. In another article written in the Wall Street Journal Paulson is: a hedge fund tycoon who made his name, and a fortune, betting against subprime mortgages when no one else even knew what they were.

What is the consensus of others on Wall Street?

The Wall Street Journal agrees with Paulson: Ignore the critics. The odds have to be on his side…It isn’t just that home prices have fallen a long way. It’s also that, if you can get a mortgage, you are basically taking a reverse bet on the bond market. You could be a long-term borrower at fixed rates, instead of a long-term lender. Right now you can borrow for 30 years at around 4.3%. After the mortgage tax deduction, for some people the net effective interest rate is nearer to 3%. That’s going to prove an awesome deal if we see inflation again. And Forbes said: As this is the best time in 50 years to buy homes, Paulson advised his listeners to take 30 year mortgages to buy a home as “your debt and interest payments get locked in at record lows, while the price of your home will rise.”

Bottom Line

Thinking of buying a home? Are you taking advice from a friend or family member telling you that now is not the time? It may be time to listen to people who better understand the opportunities that exist in real estate today.

We are John MacArthur and Lourdes Tudela, experienced Buyer’s Agents. We would welcome the opportunity to share the current information about the housing market in Maryland and DC. We believed John Paulson in 2006 and we believe him today. If you understand the basic principles at work in the economy. Now is the time to buy. Call us at 301-509-5111

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