Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
No thanks, I think I will wait. Lots of talk of prices falling. since I don't need to buy right away than why should I buy when the prices are higher? better to wait a year and see better prices I was hoping that a professional would actually admit to this. BUT...?
But nothing! You have a crystal ball? Will milk prices top $5/gallon? Will gas be $3.50 a gallon by July 1st? What effect will global warming have on coastal areas? Landlocked states? What about the presidential election in 2008? Will the fed keep interest rates down to promote spending? Will *Lost* ever be found? Will ER ever return to the NBC lineup? Will the sun still rise in the east and set in the west?
What happens if interest rates go up and payments go up? Or interest rates go down and prices go up? Or interest rates and prices go up?
Talk is cheap. Who the heck knows for sure?
Come back in a year and we can review what happened.
Not a realtor here, I'm a buyer... my friend has been telling me for years to wait and wait and wait... "the market will crash, you'll see" is what she kept telling me. Meanwhile, the houses have gone up from $175k to $400k to $650k in a matter of 8 years in my neighborhood. I finally decided to stop listening to my friend, though she is in finance. We are both still renting, but I am tired of it. I'd rather pay for a higher priced home with lower interest, if it will come out the same in the end. I do agree with the other person... if prices do come down on homes, interest rates will just go up. The only difference of buying now or waiting would be living in your own home sooner than later. Plus, with 30year mortgages, the longer you wait, the older you'll be when you pay it off! In the end though, you have take everyone's advice with a grain of salt and figure out what works best for you. Good luck!
P.S. Although I'm not listening to my friend anymore, it's too late! I've been PRICED OUT of the neighborhood I grew up in!!!
I am actually a first time home buyer too and everyone is telling me to wait and do not buy as the market is on a downslope. However, if I do wait, and the interest rates go up, does it then matter if I get a 500k house for $50K less than the asking price? Because my monthly payments will still be about the same. ANy insight?
take any mortgage calculator like the one you see on bankrate.com (a good one) and calculate what the difference is of say 1% interest rate hike vs. say your 50K price reduction over the course of the lifetime of the loan. You will be surprised at the outcome. It may not seem like much on a month to month basis but it is surely a big number at the back end. So does it equate??? I don't know because prices have not dropped enough yet it seems. but if they do and I am still optamistic that it will you will have much to gain as a first time home buyer.
What it comes down to is simple. before you form decition based on what your realtor is saying to you (sure to be pushy)... just ask yourself if you are willing to pay top dollar for garbage or 3x top dollar for something nice. If you have lots of money to burn than it may not matter to you. However if you are counting your pennies than I suggest fighting for the right price and if you can than wait this mess out. If you need to buy than do it knowing that you needed to. The reality is that it is spring time now and Realtors will bost about rising sales volumes ect ect ect... but only time will tell if waiting for the right moment will be fruitful or not... I remain hopeful. I will hold off my next purchase as long as I can. No reason to do so as prices in my area are not rising.
I'm not a realtor. My dad was and here's what he always told me.
1) Don't buy a home as a short term purchase. If you aren't planning on staying 7 years or more, rent.
2) Save up your 20% down payment. If you can't save enough, the house you are considering is too expensive.
3) Don't buy a home because you think it will save money on taxes. That almost never proves to be the case.
4) Times will always change. If you are a married working couple either one of you should be able to pay all the bills/living expenses. If you can't do this, you are overextended. Time to cut back. You need to have enough money in the bank to last 6 months at all times.
5) Shop well and do the best you can for the money you have. Don't worry too much about what the market is doing. If you live in the home for 7 years or more, you will get a fair return on your investment.
6) Go into your first home purchase debt free.
My dad is long dead and there's no doubt his advice is old fashioned. But if you follow these rules; it's almost a slam dunk you will be successful.
I think the advice businessperson and yellowsnow gave is excellent. No one has a crystal ball, no one can tell you for sure if home prices will drop or increase over the next 12 months. And the thing is, if you plan on staying in the house for several years, it won't matter. The price might drop, but eventually it will come up again. Also as stated above, prices may drop further, but interest rates may rise. No one can say for sure. So buy when you are ready to stay put for some time, and you will come out ahead in the long run.
rob, you are correct, interest rates will continue to rise...meaning your dollar is worth less....(on the spending side)
the other thing to consider, is, if interest rates rise,,then there will be more foreclosures...
we hear everyday how the real estate market has burst,,,,,etc.
but everyday..even in the poor state of maine,,,,millions and millions worth of property are sold everyday and millions go under contract.....
even when jimmy carter was president with 18% interest rates,,,houses still sold!
was the market inflated a couple yrs ago,,??,of course it was ..but money was cheap (interest rates)is the market correcting itself?? of course it is!!
If only we all had that illusive crystal ball, we'd all be rich. Of course, the idea (whether it's the stock market or the housing market) is to buy low, sell high.
A couple of things I'd consider if I were to jump into the housing market right now:
1) How much am I paying per month in rent? How much would the monthly payments on a similar home be if I were to buy now? Alot of times when interest rates are low and depending on the area in which you live, you might be able to buy almost as cheaply as what you're paying in rent.
2) There are some tax benefits with purchasing a home. All things being equal (rent vs monthly mtg pmt), you're obviously better off to buy. Plus you should realize some increase in equity depending on how long you live in your home.
3) How long do you plan on staying in your home? If you're planning on turning around and selling in a year or two, I wouldn't recommend buying in these general market climate. However, if you're planning on staying put for 3-7 years (the average time most folks stay in the same home), then history would suggest you'd be way ahead of the game to buy. The only places that this still would not be a good idea would be if you live somewhere that's dependent on some sort of industry (such as the steel industry or auto industry) where the local economy is suffering more than usual.
4) How badly would you like to own a home of your own?
I think the only regret for most people who waited to purchase their first home is that they didn't purchase sooner. They usually look back in 2 or 3 years and say, "Wow, if only we would have bought in this subdivision back then, our house would now be worth $XXX, and now we can't afford to buy there anymore."
Everybody's circumstances are different. And buying a home isn't always the best decision. (We blew it back in the 80's when we moved from a metropolitan area to a small rural town. Interest rates were over 11%, and after living in the home for 13 years and remodelling it extensively, we finally ended up selling it for $500 less than we paid for it!) Bottom line - if you live in an area where there are jobs (more people moving in than out), and you've got good credit and can get a good interest rate, and you get a good deal (as compared to other similar homes. i.e. don't pay more than current market value), and you plan on sticking around the area for severl years, then I'd say "Go for it!"
I'm not a realtor. My dad was and here's what he always told me.
1) Don't buy a home as a short term purchase. If you aren't planning on staying 7 years or more, rent.
2) Save up your 20% down payment. If you can't save enough, the house you are considering is too expensive.
3) Don't buy a home because you think it will save money on taxes. That almost never proves to be the case.
4) Times will always change. If you are a married working couple either one of you should be able to pay all the bills/living expenses. If you can't do this, you are overextended. Time to cut back. You need to have enough money in the bank to last 6 months at all times.
5) Shop well and do the best you can for the money you have. Don't worry too much about what the market is doing. If you live in the home for 7 years or more, you will get a fair return on your investment.
6) Go into your first home purchase debt free.
My dad is long dead and there's no doubt his advice is old fashioned. But if you follow these rules; it's almost a slam dunk you will be successful.
JUST REMEMBER THAT INTEREST RATES CHANGE BUT WHAT YOU BUY YOUR HOME PRICE AT WILL NEVR CHANGE. DO THE MATH. AS LONG AS YOU ARE SAVING YOU SHOULD NOT HAVE TO WORRY SO MUCH ABOUT INTEREST RATES BUT WORRY ALLOT ABOUT THE OVERPRICED HOME PRICES.
HAVE PRICES DROPPED ALREADY?... YES BUT SLOWLY.
WILL PRICES DROP IN 07 AND 08 PERHAPS BEYOND?... YES I THING SO BASED ON EXTENSIVE INDEPENDENT RESURCH.
IS IT BETTER TO WAIT? THATS UPTO THE INDIVIDULE BUT i THINK IT WOULD BE BENEFICIAL IN MOST CASES TO WAIT TO BUT LOWER.
WILL THE INTEREST RATES INCREASE? YOU NEVER KNOW PEOPLE TALK THAT THE FEDS MIGHT DROP IT AGAIN.
JUST REMEMBER THE MOST IMPORTANT THING RIGHT NOW... IN MOST AREAS THE BUYER NEEDS TO BE HIGHLY LEVERAGED TO B ABLE TO SWALLOW THE HOME PRICES IN THIS MARKET AND TWO i WONDER WHAT EVERYONE FELT ABOUT HOME PRICES AND THE FINANCIAL MARKETS IN 1929. i WONDER IF WE REALLY LEARNED ANYTHING FROM IT? HMNNN
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
First Time Home Buyer
