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I watch and hear people say all the time that right now is the best time to buy a house....but I feel like that is for most of the country, but not LI....as LI housing prices really don't drop too much (correct me if i'm wrong).
My question for you is, should a person who is looking to buy a home buy NOW or wait?
Will house prices continue to go down in 2-3 years? in 5 years? or will it start going back up?
I know no one knows for sure so just give me your opinion!
Recommend you watch Suze Orman on Saturday nights on CNBC. She has repeatedly said that real estate prices are not moving anytime soon, so no rush to get a "deal".
Trying to time the real estate market is similar to timing the stock market: you won't know when you hit bottom until it's on the way up!
If you want to buy, start looking. If you see something you like, buy it; no need to rush--you never know how long it'll take you to find the right house, so why not start now?!!
Trying to time the real estate market is similar to timing the stock market: you won't know when you hit bottom until it's on the way up!
If you want to buy, start looking. If you see something you like, buy it; no need to rush--you never know how long it'll take you to find the right house, so why not start now?!!
That is very true...
I am looking to buy myself, and will within the next 1 year regardless of trends.
There is no indication that house prices will recover any time soon - possibly the downward trend will continue and level off between now and 2014-15.
The "house bubble" was such an unprecedented upswing that put the market out of balance, so things are likely to over-compensate in the other direction before normalizing, in my opinion.
I think, interest rates are likely to go up before house prices do. Despite Bernanke's promise to keep them close to zero till 2013... it just something needs to change to get the economy out of stagnation, and I think the rates will go up.
All in all, cruel to homeowners, the current market is very comfortable for buyers (with stable jobs), and, ironically, even looking to rent. It seems that, so many houses are stuck for sale for too long, that many try to opt for renting them out and that seems difficult too...
Consistently, each year, prices are the lowest around January/February. So, on top of the overall downward trend, if one is to really go after "a deal" that would be the time. Of course, the inventory is the smallest around that time as well, and is not a great time to move, esp. if kids are involved.
If you are looking to buy a house and keep it in the long run, it really does not matter much whether you hit the absolute minimum or close enough. If it's a short-term purchase - yes, it matters.
Bottomline: 1) if you will keep the house for a while; and 2) if the rent you are paying exceeds or is very similar to what you would pay in mortgage + taxes for the place you desire, then you should consider buying and the current market is good enough.
I started this thread some time ago, and while rates have come down since, it still gives you a good idea of what impact an increase in rates can have when it comes to "cost" to the buyer (vs. "price" to the seller):
Quote: Originally Posted by Elke Mariotti Information only \
For those of you who are on the fence with regard to "buy now or wait till prices drop", I thought I'd post a chart that shows the impact of rising interest rates vs. monthly payments.
If you're thinking of selling, keep in mind it will affect you through your potential buyers.
The above example uses a self-amortizing loan of $400,000 (Principal and Interest only) as starting point. If the interest rate goes from 4.5% to 5.5% during the wait, all things being equal, a buyer only qualifies for a $360K loan, with the payment going from $2,026 to $2,044/month; if qualifying isn't an issue, the price still just went up.
Whatever your loan amount, the principle of the above example remains the same - a 1% increase in interest rates equals approx. a 10% drop in the mortgage amount, to keep (almost) the same monthly payments.
Any questions, let me know or talk to your Loan Officer.
Note: RE taxes and HO insurance are NOT included in the above example...
inception937, Elke Mariotti has given you some excellent guidance about the effects of rising interest rates, even if house prices show further declines, on the monthly mortgage payment.
inception937, Elke Mariotti has given you some excellent guidance about the effects of rising interest rates, even if house prices show further declines, on the monthly mortgage payment.
Thank you, Walter!
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or talk to your Loan Officer.
