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Just an observation: People don't get burned buying when the market is slow and not doing well. People get burned when they buy when the market is going like gangbusters, such as what we saw in 2005 in most parts of the country. None of these so-called experts (such as Jim Cramer) were issuing cautions about not buying then. It was more like - "Better not wait any longer . . . just bite the bullet and go for it." Those are the buyers that got burned.
Now the "experts" are saying, "Don't even think about buying a house!" They should be saying, "Don't even think about selling a house right now unless you positively, absolutely have to." However, someone who buys a house now is in much better shape than someone who bought in 2005 or early 2006. Even if the market slides a little further, the current buyers will almost surely recoup any temporary loss (if they stay in the house longer than 2 years), plus they will have probably been able to get into a house at below market value.
I just don't understand the "don't buy now" mentality when it was all, "don't wait, buy now" two years ago when prices were really high. Go figure.
Very well stated!!
I believe that what he said borders on criminality and is not much
different than falsely crying fire in a crowded theatre.
Just an observation: People don't get burned buying when the market is slow and not doing well. People get burned when they buy when the market is going like gangbusters, such as what we saw in 2005 in most parts of the country. None of these so-called experts (such as Jim Cramer) were issuing cautions about not buying then. It was more like - "Better not wait any longer . . . just bite the bullet and go for it." Those are the buyers that got burned.
Actually, my old roommate bought in when the market was hot in 2003. He sold in 2005 and made about 100K on a 250K townhouse, but he got out by the skin of his teeth. I held off doing the same thing because I thought the market was already overpriced.
Buying in when the market is experiencing abnormally strong growth is a dangerous game, but a potentially profitable one as long as you bail out in time.
I wish someone could explain to me how buying in AFTER the market has gone through an extreme growth cycle--and is sliding--is anything but a loosing game. Even if I can get a house for 5% under market value, if the market needs to slide another 15% before the correction is finished, that's 10% of pure equity that I've lost, yet I'm still paying the interest on that evaporated money. Yeah, it'll come back 10 years down the road, but in the mean time, I'm bleeding out tens of thousands of dollars--in interest alone--that I could've saved by holding off until the correction was finished and the market resumed a steady and normal growth pattern.
Eventually, all areas are going to hit bottom (just like they hit the ceiling) and stop sliding. That obviously hasn't happened in most places yet--at least not where I am. It seems like the absolute smartest and safest time to buy--for those who can afford to wait--is after the slide is over and once the recovery is established as being well underway--say after a year's worth of steady moderate growth in market values.
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I just don't understand the "don't buy now" mentality when it was all, "don't wait, buy now" two years ago when prices were really high. Go figure.
Buying in 2005 or 2006 would definately have been a mistake around here.
However, it seems like it was the realtors who were saying "don't wait, buy now" two years ago, so I'm going to have to be a little skeptical when I still hear "don't wait, buy now" from the same people. The people I've been listening to have been saying "don't buy now" since 2004, and they continue to call out that same advice.
I wish someone could explain to me how buying in AFTER the market has gone through an extreme growth cycle--and is sliding--is anything but a loosing game. Even if I can get a house for 5% under market value, if the market needs to slide another 15% before the correction is finished, that's 10% of pure equity that I've lost, yet I'm still paying the interest on that evaporated money. Yeah, it'll come back 10 years down the road, but in the mean time, I'm bleeding out tens of thousands of dollars--in interest alone--that I could've saved by holding off until the correction was finished and the market resumed a steady and normal growth pattern.
Eventually, all areas are going to hit bottom (just like they hit the ceiling) and stop sliding. That obviously hasn't happened in most places yet--at least not where I am. It seems like the absolute smartest and safest time to buy--for those who can afford to wait--is after the slide is over and once the recovery is established as being well underway--say after a year's worth of steady moderate growth in market values.
Obviously, waiting until the very bottom has been hit is when you'll get the most house for your money and experience the most price appreciation in the future. I guess it depends on your situation and how long you're planning on staying in a home that you purchase now. Could you lose some equity if the prices aren't bottomed out yet? On paper, sure, but if you're not having to turn around and sell during that time have you lost any real equity when the market heads upward again, past your purchase price?
On the other hand, if you stay in a rental, just to be sure prices aren't going to slip any further, have you really gained anything? What if interest rates go up? What about tax write-offs? Is there anything that has been gained by giving your money to a landlord? Plus some folks just like to have the freedom to paint the walls and remodel if they want.
Now, if you're contemplating buying right now, and are not sure that your circumstances will allow you to stay put for a minimum of 2 years, and possibly even as long as 5 years in some markets, AND you need very high LTV financing, for goodness sakes DON'T BUY NOW! But for some people who want their own home to do their own thing and they're planning on staying put for awhile, I see no reason not to buy now vs. paying rent. Put it this way, you're way better off buying now than you were buying in 2005.
Kramer is an entertainer and maybe a KOOK, but prices do continue to decline in a lot of areas, not all.
I do not know too many people that would buy anything on the decline, whether it be stock or a house.
KOOK or not he may be right/
I keep hearing "houses need to drop another xxx% before they bottom". Exactly who and what dictates that percentage? As a blanket statement it looks like a figure pulled from the air and is getting tiring to be sure!
That's like saying the dow jones needs to correct xx% before it's no longer over priced. While that may be true for single stocks in the average it's not true for all, and that's the same with the housing market.
What it sounds (reads) like to me is some WANT the market to free fall to fit their prediction or agenda, be it buy a house themselves at fire sale prices or the best one I've heard yet "so first time buyers can get them" or they just want to see the so called "well off" get what's coming to them.
Puh-lease, let's at least be honest (unlike the media) and admit the agenda!
Not all markets deserve the 30% "haircut" nor do all the houses in the markets that do need some correction deserve it.
I think one would have to actually go see the house, do an actual appraisal and CMA instead of sitting in a chair in another state and doing an "armchair appraisal" and then saying "needs a 30% haircut" don't you?
Cramer and others of his ilk are being highly irresponsible by making the blanket statements "don't buy now" or the haircut % since they can drive a segment of the market and influence people thereby benefiting personally from market swings in the form of REITS and builder stocks.
Jimj, I salute you.
In case anyone is wondering, I am affected, personally, very little either
way. However, I despise lies and manipulation of the public by those
such as Cramer. There are many agendas out there and some are trying
to manipulate markets for their own gain to the detriment of the public.
It is reminds me of the ludicrous lawsuits that help a few attornies and clients and drive up health care costs for all.
Jimj, I salute you.
In case anyone is wondering, I am affected, personally, very little either
way. However, I despise lies and manipulation of the public by those
such as Cramer. There are many agendas out there and some are trying
to manipulate markets for their own gain to the detriment of the public.
It is reminds me of the ludicrous lawsuits that help a few attornies and clients and drive up health care costs for all.
Thank you!
I think it can be a great time to buy depending on what,where and why, it's unique to each person and property.
I agree that the time NOT to buy is when it's a seller's market, when people are bidding on homes, and when homes are sold before they even hit the market. But like many other things in this country, peoples' instincts are to do the opposite of what they should do, because they see everyone else doing it. Stock market at an all-time high?! Gee, I should get back into the stock market.
It may or not be a good time to buy a home right now.
Back to Cramer saying that no one should buy a home right now, has he ever made that statement about the stock market? Of course not, he recommends buying, selling and/or holding certain stocks or certain industries depending on each and every situation. He's only recently begun to swim in the housing market pool, and already he has swung 180 degrees in a year's time.
Back to Cramer saying that no one should buy a home right now, has he ever made that statement about the stock market? Of course not, he recommends buying, selling and/or holding certain stocks or certain industries depending on each and every situation. He's only recently begun to swim in the housing market pool, and already he has swung 180 degrees in a year's time.
Actually, yes he has made that statement several times (on single stocks and sectors) and I have seen him have to eat his words because he was completely wrong (he breaks out a whip and hits himself). Cost the people that followed him a lot of money.
He just began issuing a statement after recommending a stock that you should wait a week before buying it. This was done because the stock tends to get a bump after he talks and he was making money on them and being accused of manipulation by a tabloid show.
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Extremely well said
