Q: When is the best time to buy a house in Orlando? (Kissimmee: mortgage)

[mdesler]

A: May of 2009.

10 markets set for steep losses - Orlando, Fla. (3) - Money Magazine

CNN is forecasting a 21 percent drop in home prices over the next 12 months. That's staggering. That means that if you were to buy a house today for $250,000, you could buy that same house for $197,500 in a year.

We were looking to buy a house this month, and almost signed a contract with a builder. We saw this report and decided to renew our lease for another year. I'm terrified to buy a house right now, because I might be $50,000 - $75,000 underwater in less than a year.

[dbansal]

Originally Posted by mdesler

A: May of 2009.

10 markets set for steep losses - Orlando, Fla. (3) - Money Magazine

CNN is forecasting a 21 percent drop in home prices over the next 12 months. That's staggering. That means that if you were to buy a house today for $250,000, you could buy that same house for $197,500 in a year.

We were looking to buy a house this month, and almost signed a contract with a builder. We saw this report and decided to renew our lease for another year. I'm terrified to buy a house right now, because I might be $50,000 - $75,000 underwater in less than a year.

There is no way to perfectly time the market, overall these forecasts have a pretty poor track record. From the data I've seen the market has somewhat stabilized, as inventory hasn't gone up and number of sales hasn't gone down the last few months. You just have to ask yourself honestly how long you're going to stay in the house, if it is really short term then you are probably better off renting, but if it's long term (you plan to stay 5+ years) negotiate a good deal now before the market recovers and by the time you are ready to sell the market should be in pretty good shape.

[mdesler]

Here's why I have cold feet... let's say I bought a house for $250k today with plans on moving in five to seven years. A 20% drop in one year will put my house's value at $200k. Typically, house prices rise with inflation. So let's assume that housing bottoms next summer and then goes back to historical appreciation:

2008: $250,000
2009: $200,000
2010: $208,000
2011: $216,312
2012: $224,972
2013: $233,971
2014: $243,330

So even in a best case scenario where housing bottoms in a year and then goes right back to appreciating, we'd still be upside down after seven years. And that's just looking at the sale price. Once you factor in real estate agent fees (6%), you're looking at an even greater loss. No matter how I run the numbers, it just seems like renting a comparable house is the best way to go if you're in the Orlando market.

You'd need to buy a house and live in it for at least a decade before you see a return.

[dbansal]

Originally Posted by mdesler

Here's why I have cold feet... let's say I bought a house for $250k today with plans on moving in five to seven years. A 20% drop in one year will put my house's value at $200k. Typically, house prices rise with inflation. So let's assume that housing bottoms next summer and then goes back to historical appreciation:

2008: $250,000
2009: $200,000
2010: $208,000
2011: $216,312
2012: $224,972
2013: $233,971
2014: $243,330

So even in a best case scenario where housing bottoms in a year and then goes right back to appreciating, we'd still be upside down after seven years. And that's just looking at the sale price. Once you factor in real estate agent fees (6%), you're looking at an even greater loss. No matter how I run the numbers, it just seems like renting a comparable house is the best way to go if you're in the Orlando market.

You'd need to buy a house and live in it for at least a decade before you see a return.

Depends on how much of a drop we see... I personally think 20% at this point is exaggerated. But realistically renting is not such a bad thing anyway. I guess the question is why you want to buy in the first place, are you buying because you want stability, control over your property, etc. or are you buying as an investment?

[cfIfan]

It depends in which areas you are looking. In some areas it is probably realistic to see a 15% drop. In other areas prices are already at the lowest point i believe they will go and have stabilized. Regardless of what the polls say, that is only an average because real estate is highly regionalized. The market in Kissimmee for example is going to very different from say Winter Garden. And there are a number of reasons for this, so while there may be national figures showing a further drop, this may not neccessarily translate to the particular area you are looking in. You should also consider, that if you have a good agent who is looking hard for you, there are already many properties that are aggressively priced at where they should be and infact lower. However, there are also alot of over priced properties out there, which will be the ones to fall in price. If you do your homewirk you can get a good deal. In the areas i work, builders have majorly discounted the price of their homes and are offering great incentives. Im sourcing properties for a family in the UK and i have sourced a number of properties which are brand new from the builder which are far better priced than anything in the resale market. If you have a good realtor then they will be able to show you these.

Good luck with whichever direction you choose to go.

[cagman]

orlando isn't dropping another 20%. we've already seen our huge decrease. Some of the areas of the country that are currently labelled as being "stronger" will see the 20% drop. FL rose fast and dropped fast. Now is a great time to buy in Orlando...if you can get a loan.

That's the real reason prices have dropped. too many people were takien out of the market by banks going from ultra liberal to ultra conservative in about 6 months. My contacts at the banks are saying after the first of the year, someone will set up a program to get those buyers back into the market, then all the other banks will have to follow. Just waiting on the first bank to jump in.

[AONE]

There are good ways of preventing you buy a house that plumets in price. Buy good investment homes. There are many to chose from. Ex I have a client wanting to sell the largest home available in Bellalago. It is priced well below other smaller homes without pools. it is at a 30% discount... homes like this are good deals. you jsut need to recognize them. and be able to find them in what ever area you like and in what ever price range. Love the deal not the home.

[FrozenShores]

As long as you want to stay in your home for more than 5 years you should be OK. The inventories of unsold homes haven't started dropping yet but they aren't increasing either. Luckily new home building has slowed and has probably contributed to this. However, Florida's preforeclosure rate is the highest in the nation and until all those properties are taken back by the bank and resold to the public, it will be unlikely that the inventory will drop to allow healthy appreciation in our market. I'm thinking positve appreciation will begin in 2011. We have been fortunate this time through that the fed is putting forth a great effort to keep mortgage rates low, so this may help speed recovery.

[beckycat]

Read this article:
5 new rules for home buyers - Yahoo! Real Estate

[cump]

I looked at the statistics in the article cited and compared them to the Case/Shiller data available on the S&P website. There is quite a discrepancy in the historical one year data. Here's an example: The article shows the one year price decline in Las Vegas to be 15.7%. Case/Shiller, on the other hand shows the March 2007 to March 2008 decline to be 25.9%. That is a huge difference. Other comparisons are similiar. Moreover, the Case/Shiller index uses a three month moving average. Therefore in a period of price declines it will tend to understate the actual decline over a given time period.

It is very hard to figure out where markets will bottom, just as it is hard to figure where they will peak. The residential real estate market presents a special set of challenges to those who try and take advantage of price movements.

The arguments made by some folks who seek to advance a particular view of the market's future are perhaps clouded by their financial or their personal political agendas.