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In response to the "now is the time to buy" thread I am starting this one:
I believe the market is in a severe decline and will continue to be over the next 12-24 months, with some markets getting hurt worse than others. Some, such as Dallas may or may not go down at all.
Time will tell as predictions are just predictions.
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Right.... They call it "Trying to catch a falling knife". Don't try to predict the market bottom. When a house that you want falls into your price range cautiously proceed if you want it.
Those that are REALLY analyzing this heavily are treating houses as more of investments than a place to live IMO....
I got very lucky and made money on my last house in Florida (sold in early '05), but the intent of buying the house was never to turn a profit. It just happened that way.
I think a lot of people are trying to not only buy a house for their families now, but also trying to make sure that the house doesn't initially lose any value when they buy.
It's too hard to call. If you want it and can afford it and are planning on staying there, go ahead and get it...
The LA Times has made terrible claims about the market causing people to go into the sheep like mode. People assume because it is the newspaper it must be true, because they have supposed experts working for them.
The pundits make mistakes half the time. Ie. Barak Obama didn't win the New Hampshire primary.
The media sells its product of "knowledge" to induce fear or excitement. I stopped reading newspapers, and my mental picture of the market is that it is strong. I have had a few offers written in the last month.
My point is that people need to think for themselves. The worst thing to do is act on fear. People need to learn how to objectively look at the facts about Real Estate.
--->>>>>1. It is an imperfect market!!! There is only so much land available on Earth and especially in Los Angeles.
-->>>>>2. If you want to buy a house now, go right ahead. In ten years it is going to be worth about double what you paid for it. There is no ten year period that the price of real estate has ended up less.
-->>>>3. Like my clients you can take advantage of the lower pricing and leverage you have as a home buyer in a buyers market.
Statistics come in after the fact, adn you might be surprised by an increase in homes sold compared to last year.
ok I am rambling....
EXACTLY! People need to educate themselves and treat the media like a TV sitcom! I'm amazed at the number of people who believe that if the news media reports it, it must be true. Let's think for ourselves!
--->>>>>1. It is an imperfect market!!! There is only so much land available on Earth and especially in Los Angeles.
And yet prices are dropping 10-15% a year there. Imagine how bad it is in areas which aren't so constrained.
Quote:
-->>>>>2. If you want to buy a house now, go right ahead. In ten years it is going to be worth about double what you paid for it.
Do you promise to make up the difference if this turns out not to be true?
Quote:
There is no ten year period that the price of real estate has ended up less.
How far back does your data go? I'd be curious to see your take on the period from 87-97. Or 1926-1936, for that matter.
Quote:
Statistics come in after the fact, adn you might be surprised by an increase in homes sold compared to last year.
That would be a huge surprise, since the stats show the opposite. But it doesn't really matter, since there's a huge amount of increasing inventory that has to be burned off before the market returns to normal and prices stabilize.
And yet prices are dropping 10-15% a year there. Imagine how bad it is in areas which aren't so constrained.
Do you promise to make up the difference if this turns out not to be true?
How far back does your data go? I'd be curious to see your take on the period from 87-97. Or 1926-1936, for that matter.
That would be a huge surprise, since the stats show the opposite. But it doesn't really matter, since there's a huge amount of increasing inventory that has to be burned off before the market returns to normal and prices stabilize.
I agree with both of your comments. Yes, typically statistics are compiled after the fact - so if you are using them to predict a bottom, remember that you're probably looking at 3-6 month old data.
But also, inventory is unprecidented - and not moving. Everyone I know is on the sidelines, and only people FORCED to buy, or sell, are forking out their wallets. I think the Summer and Fall will be VERY interesting - especially if the middle east heats up.
My husband and I are looking to buy in the next couple of months and have just started the process. Here in CO-Denver metro, the prices are down (in most neighborhoods), as they are most places. Which, is good for us, because hopefully we can get into a single-family house that we wouldn't have qualified for 2 years ago. We aren't looking to make a boatload of money when we eventually sell; just looking to get into a more permanent residence for the next 5-8 years and have something of our own, and perhaps, to have a little to put down on our next house. Maybe I am naive, but seems to me if we negotiate a good price on the house we buy, even if the market dips further, eventually it will go back up, esp. in the Denver metro.
--->>>>>1. It is an imperfect market!!! There is only so much land available on Earth and especially in Los Angeles.
There is plenty of land available in Los Angeles don't worry. Have you seen just how much overbuilding there was? everytime I passed Irvine area on the 405 couple yrs ago I was saying to myself "Oh no, not another condo complex!" and now they are all sitting vacant!
Quote:
Originally Posted by sethihomes
-->>>>>2. If you want to buy a house now, go right ahead. In ten years it is going to be worth about double what you paid for it. There is no ten year period that the price of real estate has ended up less.
This is absolutely false. Just ask anyone who bought in 1989 what the value of their home was in 1999. It was at most worth what they paid for it in 1989. 10year period = ZERO appreciation!
Quote:
Originally Posted by sethihomes
-->>>>3. Like my clients you can take advantage of the lower pricing and leverage you have as a home buyer in a buyers market.
Take advantage of lower pricing now yes, but in a year or two more, even LOWER pricing and even MORE leverage, so why buy now? It is a buyers market true, but it will be even more so in the near future so it pays to be patient.
Sorry RE agents but most of us are better off waiting another 12-24 months, unless investors such as myself find the perfect foreclosure or short sale.
Houses are homes but should not be a losing investment.
And definitely people with time horizons less than 10 years should wait at least 12, maybe even 24 months to buy.
When the IMF (internatinal monetary fund) is predicting the US economy will not recover until 2010 in part due to real estate now is not the time to buy although I am sure realtors would still love to make their commission. Hopefully after all this decline is done many of the bad agents will be rooted out and professionals will only remain. Wishful thinking on my part perhaps.
Last edited by Humboldt1; 04-11-2008 at 09:38 PM..
We made money on our home that we sold in 1997 as opposed to it's worth in 1989..probably not double, but pretty close
As a seller, if you need to sell, bite the bullet and sell...everyone has a different reason for selling...only you can decide what it's worth to you if you need to sell for less than you would like...on the other hand, if you are buying to LIVE in the house, then buy best you can..enjoy your home, live in it, make memories in it...worry about making money later...no matter how long one waits or sits on the fence, timing is probably off..
My husband and I are looking to buy in the next couple of months and have just started the process. Here in CO-Denver metro, the prices are down (in most neighborhoods), as they are most places. Which, is good for us, because hopefully we can get into a single-family house that we wouldn't have qualified for 2 years ago. We aren't looking to make a boatload of money when we eventually sell; just looking to get into a more permanent residence for the next 5-8 years and have something of our own, and perhaps, to have a little to put down on our next house. Maybe I am naive, but seems to me if we negotiate a good price on the house we buy, even if the market dips further, eventually it will go back up, esp. in the Denver metro.
Quote:
Originally Posted by dogmom
We made money on our home that we sold in 1997 as opposed to it's worth in 1989..probably not double, but pretty close
As a seller, if you need to sell, bite the bullet and sell...everyone has a different reason for selling...only you can decide what it's worth to you if you need to sell for less than you would like...on the other hand, if you are buying to LIVE in the house, then buy best you can..enjoy your home, live in it, make memories in it...worry about making money later...no matter how long one waits or sits on the fence, timing is probably off..
just my random thoughts
I think these two posts are point on. If you're buying a house for permanency and to actually live in for a number of years (which should be the primary reason for buying a home), then get a good deal at a good interest rate with some money down and start building equity. Especially if you can buy a home and keep your monthly payments close to what you're paying in rent, then you're ahead of the game.
On the other hand, if you are an investor and looking to time the market and/or are looking to sell again in a short time frame, then you need a heckuva deal to be able to break even in a couple of years. Rental properties might be a smart move, even now, as many homebuyers sit on the sidelines preparing to wait things out. For the investor it's all about the deal you can make now and the price you can sell at down the road.
I think these two posts are point on. If you're buying a house for permanency and to actually live in for a number of years (which should be the primary reason for buying a home), then get a good deal at a good interest rate with some money down and start building equity. Especially if you can buy a home and keep your monthly payments close to what you're paying in rent, then you're ahead of the game.
On the other hand, if you are an investor and looking to time the market and/or are looking to sell again in a short time frame, then you need a heckuva deal to be able to break even in a couple of years. Rental properties might be a smart move, even now, as many homebuyers sit on the sidelines preparing to wait things out. For the investor it's all about the deal you can make now and the price you can sell at down the road.
Kudos to Gretchen! Exactly
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we're looking to buy
