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So is it time to buy a house? Has the market bottomed out?
Home values declined more than 16 percent from 2007 to 2008, according to the S&P Case-Shiller Home Price national index, which compared the third quarter of each year. And while that is upsetting news for homeowners, it could be very welcome news to those who were shut out of the American Dream because prices were too high.
I imagine some areas are close to bottom, but I think most are still declining. A few are holding steady. I think what you do depends on where you are, and how many foreclosures are going to hit the market, etc.
Like the above statement, I think it strongly depends on where you are and the local market. Here in Columbia, at the moment most in most cases it is cheaper to buy than it is to rent. There is no way to be certain how long this trend will continue. If you are planning on satying in your home long term and you are secure enough in your finances, then at least at the moment I would say now it's better to buy in Columbia depending on wjat you are looking for.
I'm holding out hope for a listing that can convince us to buy, but the spouse is now firmly in rent territory.
The housing bubble was one thing.
The economy is another thing entirely.
By my count, the housing bubble (albeit smaller than the "big" ones) still had some deflating to do. Factor in further normal deflation that would occur in a severe recession and you're now double dipping on downward price pressure.
When the housing bubble was the only thing we had to factor in, we had a sense of where the "bottom" might be based on historical trends. Now, with the economy going off a cliff, there's no way to tell where or when things will level out.
Then again, the government is tinkering. Then again, interest rates might start to rise. Then again, inflation might be a factor at some not-so-distant point.
Then again, maybe we'll just rent a nice house. There seem to be more and more of them available.
Very unlikely that the market has bottomed. If the question you're asking relates to buying real estate anywhere in California, Nevada, Arizona, Florida, Manhattan, the DC area, or any place where 2nd homes predominate, the answer is definitely NO.
Remember that relative to inflation, real estate is not a terrific investment historically. Also remember that all real estate is local. Someone who purchased 25 apartment buildings in Detroit in 1950 hasn't done real well on their investment since then. Someone who purchased 25 empty acres in Orange County at the same time has probably cleaned up.
I asked my crystal ball, and it responded that my monthly rent is cheaper than the monthly insurance & taxes on a starter home. It also said insurance rates were going up 30% in 2009, and local property taxes were going up too.
It went on to say that the rental market was flooded, and that was where the deals were to be found, helping someone pay off a 1998 mortgage, or a 2002 one, instead of exposing myself to the risk of the deflating bubble.
In new Jersey prices are still overinflated. I have been watching the market for over a year. People have hardly come down in price at all. Others took their house off the market over the winter and came back listing only a few thousand less. Ha If our income has only grown 10% here and houses have gone up 135% there should be s much bigger decrease. Especially with all the financial jobs going around here. Some states have dropped 30% to 50%....I'll wait for prices to drop further and rent for a while unless I see a big price decrease, short sale or relocation and know I'm getting a good deal!
In NJ I say rent!
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