Realtors honest opinion of current market? (agents, foreclosure, closing, sellers)

[NatasNJ]

I realize that realtors sell houses and without SALES they don't get paid. So I see where it is in their own interests to always look at the reasons to buy versus the reasons not to buy. I get that.

BUT... I have a few questions about that. From my experience realtors told me it was a great time to buy when the market was going through the rood and have gotten same sales pitch as early as yesterday. How is that possible? How can it seem always a good time to buy?

I got a call from my realtor yesterday informing me of rate cuts and how the rates are great and I should buy ASAP. Well is that a valid reason to buy in this climate? Cause from EVERYTHING I read it seems like this downward slide is FAR from over. Case-Shiller numbers show nothing but downward trends in basically every market. Layoffs, foreclosures, short sales, are all going to factor into prices dropping. Retail season expectations are that it is going to KILL retail and probably kick off tons of more companies laying off people and closing stores. I could go on here so HOW is it a good time to buy NOW?

I personally see waiting to be the best option right now. Save my down payment money, allow it to earn something versus watching it get eaten away on paper by buying a house today. I see waiting till the Spring at the earliest to consider jumping back in and the Spring now looks like it may be to early and that Summer or Fall may be the time when values come closer to the bottom. Heck 2010 may be the realistic time to consider buying.

I was just offended that my realtor threw me this sales type pitch about rates to prompt me to buy something now when just YESTERDAY I told her that I was planning to not buy anytime this year and waiting till Spring at the earliest. Regardless to say I think I am going to be going with a new realtor soon. (other reasons contribute to this)

[TampaKaren]

In the Tampa Bay area, (some) sales are back to pre-1990's prices. Short sales and foreclosures have driven prices down and inventory is plentiful. Economists say that when payments are less than rents, it's a good time to buy which is prevalent here. Everyone has to make their own decisions, but I'm actively buying and building a real estate portfolio. The best money I will ever make is from my own investments.

[chet everett]

The bottom line is that if you want/need a house there is never a really bad time to buy a house that meets ALL your needs. A home is NOT purely an economic asset. You literally "buy in to" a lifestyle and mindset. This is true to some degree at EVERY price point/situation. Way back, before I was married, I rented an apartment and hated it. I then rented a house for about the same money, but it was frankly in POOR condition. The condition did not matter to me, becuase the location was good, the size was good, and the price was right. I eventually became friends with my landlord. He fixed the place up, and he and I learned things about fxing places together. After I moved on to buy a similar home to live in, he continued to rent that place out, at higher rates.

When I wanted to move out of my started house with my wife we decided it made more sense to rent out that first house instead of sell it. The market for selling was CRAP, unemployment was high, interest rates were out of sight, people were just DOWN on real estate. That, along with a sizeable amount of savings, enabled us to buy a nice house at a good discount. We lived their for quite a while. When we "moved up" out of that we made A LOT of money, but sunk MOST of it into a house in a really top notch neighborhood -- one I still live in, and seems to be very resistant to downward shifts.

Meanwhile I continued with my regular job, and on the side ran the rental house, and added more. I learned a lot, got a bit more involved in traditional real estate sales, made lots of great contacts and was VERY busy.

Over the years I have seen periods when it is tougher to sell houses, and periods when it is ridiculously easy. This is just the way it goes.

When you want/need to sell, and the market is against you, there is not too much you can do, especially if you look at the fact that for most people a house is far and away their largest asset.

I do believe that you are correct to be skeptical about real estate agents pitching EVERY time as "a great time to buy", but you have to realize that in addition to the THEIR need to make a living, the BUY side ALWAYS has more options -- the rental option is ALWAYS out there, in an inflated market SOME buyers will be willing/able to bring more money to the table, in a falling market a buyer is SALVATION to sellers, et cetera...

On a purely financial basis one would need PERFECT KNOWLEDGE of future conditions to make money on every real estate transaction, but if you had such a crystal ball your ability to make HUGE gains in the financial markets would be even better. Heck, maybe you remember how a certain former First Lady made a huge gain on cattle futures but lost her touch with real estate...

Hillary Rodham cattle futures controversy - Wikipedia, the free encyclopedia
Whitewater (controversy - Wikipedia, the free encyclopedia)

[Gretchen B]

Obviously now is a better time to buy than 2 years ago. Will now be a better time to buy than 2010 or 2012 or 2018? No one can predict that. What will interest rates be in those years? Again, who knows? The same thing goes for the stock market. Many say it will continue to slide, and now it appears that it may be relatively flat for the next 10 years or so (according to some expert on "tech watch" yesterday). Bottom line is - nobody knows.

Where do you want to put your money is a better question. Some folks like stocks. Some people prefer real estate. I heard of parents in Phoenix who are buying a bargain-priced home for each of their toddlers as a sort of "college fund". They'll rent the homes (3 of them) for the next 10-15 years and then sell them when the kids are ready to go to college. Will the homes be a good return on investment in those next 10-15 years? It's a guess, but I think most would assume they will be.

From a purely investment standpoint, my personal opinion is that we're pretty much at the bottom and will continue to stay there for at least a couple more years. I can only talk about my local area, of course, but inventory has remained fairly level for 2007 and 2008, with only seasonal increases and decreases. The bargains are out there, and the bargains are selling fast. I do think we'll see prices on non-foreclosure properties drop to get more competitive with the bargains out there . . . but it's not going to change the median sales price much, because only the well-priced homes are the ones that sell. What may possibly affect things more are interest rates. If we enter an inflationary period, (which some "experts" are predicting we will as we recover from this recession) then significantly higher interest rates may make bargain priced homes of today less affordable down the road.

The biggest question of all, though, is whether you view buying a home as purely an investment (which also includes certain tax benefits) or as a place of shelter. Chet referred to this in his post. If the mindset is to have an enjoyable place to live for a number of years not just 3 or 4, then it would be hard to argue that delaying buying a home until next year is going to bring you any dramatic investment advantage.

Remember, too, that timing "buying low" is only 1/2 of the money making formula. You also have to "sell high". Do you feel that home prices will have risen by the time you're ready to sell again? If so, then the "point" that you decide to buy during this prolonged "bottom" may not be as crucial as you perceive it to be.

Obviously each local market is different, and if you live in an area that has had better-than-average home buying activity then those places may be just starting to see the declines in prices that the rest of the country has been experiencing for the past couple of years.

[HappyTexan]

FWIW..stock brokers are also telling people to jump into the stock market because "prices are at an all time low" and now is the time to buy. Same question prevails though..how will the market look like in 1 year from now.

What did it look like last year and what were these people saying last year ? This goes for both real estate and the stock market.

IMHO..things look worse this year than last and bleak for the future seeing all the debt the government is taking on, corporations laying off people and the consumer stop "consuming".

There seems to be no end in sight to these daily, weekly new bailout plans.

[chet everett]

Originally Posted by HappyTexan

FWIW..stock brokers are also telling people to jump into the stock market because "prices are at an all time low" and now is the time to buy. Same question prevails though..how will the market look like in 1 year from now.

What did it look like last year and what were these people saying last year ? This goes for both real estate and the stock market.

IMHO..things look worse this year than last and bleak for the future seeing all the debt the government is taking on, corporations laying off people and the consumer stop "consuming".

There seems to be no end in sight to these daily, weekly new bailout plans.

I do not how to make this any clearer: FUNDAMENTAL difference between owning a PURELY economic asset that provides ZERO utility and a HOUSE!

If you need some place to live it is NOTHING LIKE trying to decide what to do with savings. NOT THE LEAST BIT.

Owning a house, or renting, or living with a buddy, or putting up a tent under the freeway are alternatives.

Putting money into a stock, or a bank, or under your mattress, or buying chains from Mr. T are alternatives.

[HappyTexan]

Originally Posted by chet everett

I do not how to make this any clearer: FUNDAMENTAL difference between owning a PURELY economic asset that provides ZERO utility and a HOUSE!

If you need some place to live it is NOTHING LIKE trying to decide what to do with savings. NOT THE LEAST BIT.

Owning a house, or renting, or living with a buddy, or putting up a tent under the freeway are alternatives.

Putting money into a stock, or a bank, or under your mattress, or buying chains from Mr. T are alternatives.

Sure it is..plenty of people view their homes as investments that will appreciate so they can sell for a profit.

[Brandon Hoffman]

When stocks are down it a great time to invest them, given it's a safe stock that has historically done well. When stocks are high, it's a bad time to buy them because the buyer will probably overpay.

Now replace stock with house and see if it makes more sense. It's not always a great time to buy, but I think now is a great time to buy. When you add in the low interest rates, it only furthers the argument.

[middle-aged mom]

Originally Posted by chet everett

On a purely financial basis one would need PERFECT KNOWLEDGE of future conditions to make money on every real estate transaction, but if you had such a crystal ball your ability to make HUGE gains in the financial markets would be even better. Heck, maybe you remember how a certain former First Lady made a huge gain on cattle futures but lost her touch with real estate...

No doubt about it, the stock market has out performed real estate. There have been some, once in a lifetime, opportunities in the market over the past 3 months, in one of the most volitile markets ever.

[TampaKaren]

Originally Posted by middle-aged mom

No doubt about it, the stock market has out performed real estate. There have been some, once in a lifetime, opportunities in the market over the past 3 months, in one of the most volitile markets ever.

Yes, ma'am. . . we're IN!