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I'm currently renting an apartment. I've been renting for about 10 years now, mainly because I kept moving from city to city, but also to save up money for a down payment on a house. Well I'm finally done moving and am ready to plant some roots. I've got a good paying job, no debt outside of a car loan, a good credit score, and enough to put down 20%. Problem is that the housing market is terrible. You'd think that would be great for someone like me who's looking to buy. But like a lot of buyers, I'm reluctant to buy anything. The value of whatever I buy could drop or I might need to sell and not be able to without taking a loss. Given how bad the market is, do you think it would be wise for me to buy a place or should I just wait? How will we know when the market has truly bottomed out? Also, I don't expect interest rates to go down anymore, but what are the chances of them going up?
In what city are you considering buying? That's a big factor. But if you think there's a really good chance you wont stay 5 years or longer in the house, probably renting is best.
I'm currently renting an apartment. I've been renting for about 10 years now, mainly because I kept moving from city to city, but also to save up money for a down payment on a house. Well I'm finally done moving and am ready to plant some roots. I've got a good paying job, no debt outside of a car loan, a good credit score, and enough to put down 20%. Problem is that the housing market is terrible. You'd think that would be great for someone like me who's looking to buy. But like a lot of buyers, I'm reluctant to buy anything. The value of whatever I buy could drop or I might need to sell and not be able to without taking a loss. Given how bad the market is, do you think it would be wise for me to buy a place or should I just wait? How will we know when the market has truly bottomed out? Also, I don't expect interest rates to go down anymore, but what are the chances of them going up?
Denny, that is the million dollar question. If I (or anyone for that matter) had this answer, we would be EXTREMELY wealthy.
As the other person posted, the market where you are looking to buy IS very important. Some areas are more stable than others...
In what city are you considering buying? That's a big factor. But if you think there's a really good chance you wont stay 5 years or longer in the house, probably renting is best.
Atlanta. I'm pretty sure I'll be staying here for more than 5 years, but since it's very common to have to change jobs, I don't want to buy a place in one area, have to change jobs, and then discover that I can't sell my place and be forced to either endure a really long commute or pass up potentially great jobs because I was anchored down by a house. I have friends who are stuck in that position and envy me for my mobility.
Atlanta. I'm pretty sure I'll be staying here for more than 5 years, but since it's very common to have to change jobs, I don't want to buy a place in one area, have to change jobs, and then discover that I can't sell my place and be forced to either endure a really long commute or pass up potentially great jobs because I was anchored down by a house. I have friends who are stuck in that position and envy me for my mobility.
It sounds like you answered your own question, the RE market is not robust right now, so if I was you I would rent.
Well I'm finally done moving and am ready to plant some roots.
I've got a good paying job, no debt outside of a car loan, a good credit score, and enough to put down 20%.
that makes you the perfect candidate to be a buyer.
Quote:
Problem is that the housing market is terrible. it always is
The value of whatever I buy could drop or yep
I might need to sell and not be able to without taking a loss. oh well
Given how bad the market is,
do you think it would be wise for me to buy a place or should I just wait? this was covered in the first section
How will we know when the market has truly bottomed out? we won't /1998 price levels if in good condition
interest rates to go down anymore, but what are the chances of them going up? they'll go up... have to
buy a house because you want to have a house...
and expect to be there for X+ years (x=no less than 5)
Talk to a good, experienced local agent. Preferably one referred to you by someone you trust who has used them and had a good experience. Tell them the parameters you are looking for, in broad terms (like "3 bedrooms in XYZ part of town in the $150k-$200k range). Have them look up and tell you how many month's supply there is for those parameters. (an experience agent will know what that means, but so you know, that means at the current rate of sales, how many months would it take for the current inventory to sell, if no new inventory came on the market). If there is only 4 or fewer months of inventory, now MIGHT be a good time to buy, as that COULD be a sign of some recovery. If there are more than 7 months of inventory, it is likely that market still MIGHT have a ways to go. Anywhere in between 4 and 7 months is marginal which way it could go.
I use "might" and "could" because all you are getting here is a snapshot. There could have been some influencing factor that threw off the numbers for that time period, like banks releasing some shadow inventory, or an investor buying up a bunch of properties at once as a one time thing. What you really need is to have numbers like this over the course of a few months, showing which way the market is trending, and those usually are not available for the past, you can only gather them as you go. Also, these numbers are somewhat arbitrary. I just picked some based on the fact that a "stable" market has historically been around 6 months of inventory.
IMPORTANT DISCLAIMER: This is only a very very very simple way to make an educated guess. It is not accurate, it is not a crystal ball. As others have said, there is no way to know when you have hit the bottom. Plus, you don't want to buy at the very bottom, because once you have hit the bottom, you are usually getting into bidding wars with everyone else wanting to buy. The best time to buy is right BEFORE the bottom hits.
I would expect interest rates to increase, but again, no crystal ball, only opinion.
How will we know when the market has truly bottomed out?
We won't - until it fluctuates for a few times and goes back up steadily for quite some time... but then, you'll be sorry you didn't act faster
In Atlanta, prices are so low, there is just not much room for them to drop significantly - IMHO, to make it worth renting a few more years based on that risk of further slightly dropping values... if I wasn't stuck here for now, I'd gladly move there. Been looking! All just imho
Hard to tell when we've 'hit bottom' because once it goes up, it's anyone's guess as to whether it'll go back down. In that case, you've missed the bottom!
Boy what I'd give to have a crystal ball!! lol .. I've been looking and looking for it.
Hopefully you won't 'have' to sell for a bit. If you do, renting is always an option. Seems that rentals are hot right now in particular areas. At least that way, you'd still retain the property until you're really ready to sell.
It's a buyers market right now around here (most of the Atlanta area with a few exceptions). As Lacerta said, find a good agent that can run some figures for you.
Only you can decide when you're really ready to buy.
I was in your shoes 2 years ago and decided to buy instead of renting. I bought the lifestyle really more than anything. When compared the rent of what I wanted to have to the monthly payment it made sense to me to buy. Now, my house is $10,000 less than what I paid for it, but I am not moving anywhere yet and even if I decide to move I plan on renting it. If you can buy something and rent it if you change jobs and decided to move, I would say now is a good time to buy. We are still at the bottom as you can tell, dipping down more and up a little but we still at a low point that we might not see again "really hoping" for a long while. If you go back and look at the real estate market trends, we have about 10 years to recover and for people to really see their home values go up.
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All just imho
