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Time to buy a condo?

Question: Thanks for being a voice of reason, especially these past few weeks.

I am a 56 yr old, single woman. I owned my own business for 16 years and consequently am only now beginning to put away money for my retirement. I have about $35,000 inheritance from my father. I am employed at a non-profit research institute, which relies largely on grant funding, but which has been decently funded for 50 yrs.

Here's my question: as I am looking to plan a retirement, I am considering buying a condo now in the $200 - 235,000 price range (housing here is such that anything less than that is nothing I'd really want to live in). If I use the inheritance money for a downpayment, I should be able to get a mortgage that I can comfortably afford - and still be able to put money in my 403B(10% of my salary + 3% from company and HSA ($3800. per annum). So, is this a brilliant time for ME to buy? Or is it foolish?

I keep my money in a local FCU, and although I haven't looked recently, I believe they are still making mortgage loans. I look forward to your thoughts. Mary Ellen, St. Paul MN

Answer: It's intriguing that we're starting to get more questions like yours. Home prices may be hitting a level that interest more buyers.

I think now is a great time to look for a house, to research a home, to visit lots of homes and condos, investigate neighborhoods, and really figure out what you like in your price range. I don't think you are being foolish at all.

That said, there's no rush to buy. It's a safe bet that home prices are still heading lower, especially with the economic downturn gathering momentum. I believe the credit crunch or credit crisis will come to an end. Clearly, it won't be easy, but governments and central bankers everywhere are making a concerted effort to break the credit logjam. Yet the damage to the real economy of goods and services, jobs and incomes will haunt us for a long time even after the financial institutions start borrowing and lending again.

Of course, none of us can really time bottom. But if you spend the time now finding what you want you can then evaluate whether it's a good buy for you. And at some point prices will bottom out and the market rebound.

When you're looking, also think about retirement. For when it comes to finding a retirement home, the best answer for many people is current home. I have a feeling that you'll want to stay in this place, so look into how feasible the condo is from a long term care point of view. Staying at home doesn't just mean judging whether its an easy place to live in as you age, but it also means evaluating the infrastructure of your neighborhood. Among the key question to ask: Is there convenient public transportation or are family and friends willing to drive you around? What medical and home health care services are available?

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