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The rental market is very hot right now. You can practically name your price (within reason for a nice home). If you're planning on purchasing now and renting for a period of time, now may be a really good time to do that. I too believe our home prices are pretty much flat lined in the low to mid price range.
I think it's a great time to purchase if you get into an already foreclosed home in good condition, and/or have the patience for a short sale transaction - the are getting fewer and fewer in Mtp to come by, so they move very quickly. If you start now to get a good feel for the pricing of resales, then you will recognize the "deal" when it hits the market and be ready to move on it - some of them go to multiple bids, but usually the selling agent submits the first offer and wants to wrap it up asap with the bank, as does the bank want to wrap it up - so preparedness is key, and you can get a great investment. If you are looking to purchase, and you have to do FHA, I encourage you to get out there this weekend and find a place! it's possible that fha will go up to 20% downpayment (from 3.5%) and also it's possible that if there is a gov shutdown that you will not get any FHA financing at all due to the inability to obtain a case number - it's getting crazy!
Thanks for all the replys, these posts are always so helpful and appreciated!
I've been watching the market now for the last few years. I think it will either stay flat or drop more. Recently though, I have been seeing bigger houses in nicer neighborhods on nice lots, ponds etc. at lower prices, which of course has made me way more picky.
If interest rates rise which they eventually will have to, Home prices will have to fall further as buyers won't be able to borrow as much as they can now.
Right now the real estate market continues to be propped up by the Federal Reserve Bank. If interest rates were allowed to go up to where they should be (around 6 percent) home prices would come down further.
Part of the reason our economy is so screwed up is due to the interference by the Federal Reserve Bank by keeping interest rates so low. There is no incentive to save money as there should be and always is in a healthy economy. Rather it is all about borrowing and spending which caused all the bubbles to begin with. Ben Bernanke wants to reinflate the bubble but it hasn't been working AT ALL.
Peter Schiff says that when prices come down to where they were in the 1990s we will have bottomed out. He thinks some areas have bottomed but others still have a ways to go. Here's a recent article he wrote on the subject. http://peterschiffblog.com/housing-p...ficially-high/
Don't only look at home values as being the 'bottom'. Also take into account interest rates. For example:
- A $200,000 loan amount at 4.5% for a 30 year fixed mortgage has a principle and interest payment of $1,013.37 for a total of $164,813.83 in interest over the life of the loan.
- A $180,000 loan amount at 5.5% for a 30 year fixed mortgage has a principle and interest payment of $1,022.02 for a total of $187,927.28 in interest over the life of the loan.
So even if a house that is 200K now falls to 180K in the future- you could have the same monthly payment (plus end up paying almost $25,000 more in interest over the live of the loan) if the rates go up 1 percent. So in the example above, the person would have been better off buying at 200K. I'm just saying to look at rates, too. They might just go up before you know it.
Better off? Huh??
What happened to the $20K you saved off the purchase price with a higher rate?
What about time value of money if you invest the $20K savings assuming you had it available? Using a nominal rate of 5%, compounded daily, a $20K left in an investment to grow is worth about $90K....
And if rates go up, even better for my savings.....
And what about the mortgage interest deduction?
One is NOT better off buying at $200K...not by a longshot....
The best time to buy in Charleston is always the winter. There are fewer buyers and sellers get antsy. According to some stats I saw today, the official 'bottom' as far as activity levels go (meaning people buying) was January 2009. Prices will probably go down a little bit more because foreclosures of owner-occupied homes are about to increase again after a dry spell. There are some neighborhoods and price ranges though that are already in somewhat short supply. It just depends on where you are looking! Hope that helps.
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