Advice on buy or hold off on home purchase in current market? (real estate, rent)

[pragmatic12]

Home prices seem to have increased in the area by about 15-20% from the 2010 downturn period. So a home that would have been priced at 500k now costs 600k. In other words, an increase of 100k, which is quite significant.
Trying not to purchase at a peak. Especially if the interest rates rise and cause a corresponding decrease in prices later. What do folks around here think about this - does this data sound correct, and would you buy or hold off? Is the current price inflated?
Looking to get some thoughts, TIA!

[spencgr]

Oh crystal ball, where did I put you?????

[jtees4]

When the peak is here, please let me know! No one knows when a peak is here. If someone thinks they know, then they should be the last person you listen to. If you are buying a first home, and plan on buying another home at some point in your life....then the price matters little anyway. After all you will either buy high and sell high or buy low and sell low the next time around. If you wait to buy the market could very easily pass you by altogether while you wait for the right time. The right time is when it is right for you, and you have the money to do it. Good luck.

[Old Guard]

I would decide on some areas and then look in those areas and if you find something that you like buy.

The reason I would do this is because you will get long term data for the types of homes you are looking for in the areas that you like. Almost all other areas are meaningless.

It only takes one home you are interested in to come open at a price you think is fair so it does no harm getting on a real estate agents automated mailing list for the houses and areas you like. Even if you are interested in buying it still may take you months to find what you are looking for.

Also do not trust the pictures. There are many houses with great pictures that are awful when you see them in person as well as the opposite of that. That darn fish eye lens or whatever they use to make rooms look girmous is a huge turn off as well.

[airjay75]

If you're buying a home to live in, planning to stay there at least 5 years, and will be putting at least 10% down, then I think you don't need to worry about timing the market. If you're going to put significantly less money down, then you probably need to plan on living there for closer to 10 years. I think those are relatively conservative parameters although some would be even more conservative. If you can't meet those parameters and your plan, instead, revolves around market timing, you probably shouldn't buy a home right now.

[Germany2DC]

Not sure how much home prices have risen but when buying you should also be concerned with the interests rates for a home mortgage which are currently low when compared to rates over the past few years. We recently purchased a home and received a 3.652% interest rate.

[HB2HSV]

Originally Posted by pragmatic12

Home prices seem to have increased in the area by about 15-20% from the 2010 downturn period. So a home that would have been priced at 500k now costs 600k. In other words, an increase of 100k, which is quite significant.
Trying not to purchase at a peak. Especially if the interest rates rise and cause a corresponding decrease in prices later. What do folks around here think about this - does this data sound correct, and would you buy or hold off? Is the current price inflated?
Looking to get some thoughts, TIA!

Over the long run, a house is a good investment for the following reasons:

1) Hedge against inflation. House will appreciate in value equal or greater than inflation
2) Provide tax write off on mortgage interest & property tax. Put your money to work for you.
3) In a highly in demand city like the DC metro, the demand outweighs supply therefore will drive prices further upward.
4) Consider it as part of your long term retirement plan
5) Psychological impact of home ownership. Makes you a more responsible mature adult, hence a good marriage material

The disadvantage of home ownership:
1) Tie up your money into "non-liquid" asset. It costs more than rent when you factor into maintenance cost. You will have less disposable income for buying other things.
2). Less mobil. You can not decide one day just get up & move
3). Made a wrong choice. You'll be stuck with that choice for a long time.
4). Sell at a wrong time. You may loss money as your investment.

So the real question is this a good time to buy a house for you?

The best time to buy a house was between 2008 and 2012. But that was a Monday morning quarterback insight. Going forward, what is your personal situation? Do you have a burning desire to own a place of your own? Are you willing to sacrifice your life style for a home ownership? Those are the real questions you need to ask yourself.

Do some soul searching

[FCNova]

Originally Posted by pragmatic12

Home prices seem to have increased in the area by about 15-20% from the 2010 downturn period. So a home that would have been priced at 500k now costs 600k. In other words, an increase of 100k, which is quite significant.
Trying not to purchase at a peak. Especially if the interest rates rise and cause a corresponding decrease in prices later. What do folks around here think about this - does this data sound correct, and would you buy or hold off? Is the current price inflated?
Looking to get some thoughts, TIA!

Are you talking about an investment property, or a primary residence? It's impossible to time the market. If you're buying a house as a primary residence just don't even worry about it. Buy within your means, and make sure you are going to stick around for awhile. Otherwise just rent.

I think home prices are a little inflated, due to the low rates. But I also don't foresee a crash of any kind because rates are going to rise very slowly.

[Ashley Tauzier]

The prices of homes are definitely increasing, but more so the closer you are to DC. So it all depends on where you are looking to purchase a home. Also experts are saying interest rates will be increasing by the end of the year, but who really has that crystal ball to know for sure. If you know the area and types of homes you are looking for, I can look in the MLS and tell you the difference in prices from 2010 to now, so you have a good idea! The bottom line is that owning your home comes with lots of benefits, but with equal amounts of responsibilities. If you plan to stay in the same home for a few years and want the chance to build some equity, then the time is right.

[vademo]

I think the prices will just go up. There is a huge demand in market and homes within market prices are sold in 14 days. Our neighbor just sold their places in 5 days above the market place. I think summer also will increase the prices since it is more common time to buy properties. You can wait until Winter and save some money.