Buying a Atlanta house is a smart investment these days, assuming you can get a loan. Granted, everyone has an opinion about the housing market cycle. Have we hit bottom? Are we already past the bottom and on the way up? Opinions about the housing cycle are like butts, everyone has one.

Trying to figure out when the best time might be for buying a Atlanta house can be tricky, considering how long housing cycles are. You can always buy low and watch prices go lower. But by many measures, home prices are still cheap.

The median single-family home price — half higher, half lower — seem to have hit its bottom in January, dropping to $154,600, the lowest since October 2001, according to the National Association of Realtors. That’s down from a high of $230,900 in July 2006. Existing-home prices rose in June to a median $190,100, up 8% from June 2011. Those are still 2003 levels.

The supply for buying a Atlanta house is shrinking. This supply shortage is due to people not wanting to sell their homes while prices are down. When excess supply dries up, people start building more new houses, which has the effect of reducing the unemployment rate and increasing the economy in general.

Mortgage Rates for Buying a Atlanta House

If you’re buying a Atlanta house now, mortgage rates are still crazy low, compared to historical rates for a home loan. Assuming you financed 80% of a median single-family home, or $152,080, your mortgage payment would be about $691, excluding taxes, insurance, HOA fees, etc. About $5,589 of your first year’s payments would be tax-deductible mortgage interest.

So what could possibly go wrong if you’re buying a Atlanta house? First, you may not be able get a loan. Bankers are insisting on checking things that seemed far too troublesome during the housing bubble, like whether you have a decent credit rating, a down payment, or a job.

Another Problem When Buying a Atlanta House

The other problem is that houses are leveraged investments — that is, you borrow money to buy them. Let’s consider the example above, where someone buys a $190,100 house and finances $152,080. Your investment is $38,020. Let’s say that the worst happens: home prices fall, and you have to sell the house for $175,000.

Unfortunately, the bank won’t split the loss with you. You’ll get back $22,920 from the sale, and wave goodbye to $15,100 of your down payment. That’s a 40% loss, even though your house has fallen 8% in value.

There are other risks when buying a Atlanta house, ranging from termites to water leaks. But if you’re planning to live in your home for a long time, you have the money, and you can get financing, there’s probably never been a better time to buy.