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I do kind of believe that NOW is the time to buy, even if it's the media that's getting to me. It's just that I'm a first time homebuyer and the incentives are SO great! I put an offer on a $83,000 house (a really nice house for the town I live in). Because of the tax refunds and special loan programs, I estimated that my savings due to the incentives ONLY is $15,000 saved. That's HUGE when the house I'm buying is only $83,000 to begin with. $15k may look weaker if I were buying a $350,000 house but I'm SO motivated to get a house and there's a lot of my friends and first time home buyers that are actively hitting the pavement too. Maybe it's just my paranoia, but I think the market is going to pick up this year - no?
I'd recommend buying based on long term/historical valuations. Check the HOI index and historical prices in your area
if affordability is good compared to historical norms, and prices aren't too high, then by all means, go out and buy something.
In my area, you can't get anything close to a decent house in a blue collar (let alone middle class) neighborhood for 83k. If such places existed, I would buy now, even if there was a risk of being down after a year.
In my area, you can't get anything close to a decent house in a blue collar (let alone middle class) neighborhood for 83k. If such places existed, I would buy now, even if there was a risk of being down after a year.
Thanks for the link! I check it out- pretty cool!
I know the housing is crazy cheap in our town. We all about die laughing when we see the prices of homes on shows like House Hunters. However, we are in an old community where the steel mills no longer run. I live in Youngstown, Ohio which is about an hour either way from Cleveland, OH or Pittsburgh, PA. A lot of people who live here commute to work.
Youngstown itself is very crime ridden, but the suburbs are lovely. The house I'm looking at for $83,000 is in the ritzy suburb of Poland, OH. It's a great deal because there's only 18 homes in Poland under $100,000. It's a short sale which accounts for the nicer price.
Housing is amazing here. A girl at work bought a few years back (so not to confuse you with the current uphill and downhill trends) a 3000 square foot home in the prestigious high-rollers suburb of Canfield for $250,000. That kind of money gets you new-construction mansions.
We're our own little bubble though. The economy here really does stink because we never recovered when the steel mills went under. The only thing that's keeping us afloat is the GM Lordstown plant where the Chevy Cobalt is made. And lord knows how GM is doing now! Somehow our horrible economy has gotten even WORSE! But while some of the bigger houses are going into forclosure, no crazy stories yet about people killing their families or co-workers after losing their job. Not yet at least.
That's some insight into our world, our bubble called Youngstown.
In 1999, median price was $140k, If you compounded that at 3%/year you would be at $175k today. Today the median home price is $190k, so we are not too far off. Less than 10% decline from here, which is what some analysts predict before the bottom. EDIT: The national median home price today is $165k (4Q08 was $190k) so it looks like we are past the bottom? The stock market today thinks so too based on BofA and Wells Fargo up 30-36% in one day on earnings outlook.
Last edited by glenn_1000; 04-09-2009 at 03:02 PM..
You know, this thread has been very informative to me. There have been so many nice contributions (on both sides) that have helped me shape my opinions going forward. Thanks to all, I appreciate the dissenting opinions and the support from both sides.
There are a number of factors that will keep house prices down well after the real economy has recovered.
For example, unwinding some of the government interventions designed to prop up the bubble, such as low rates and the first time buyer tax credit will put downward pressure on prices.
Whether the economy recovers quickly or not, this bubble doesn't have much left in it.
Americans need to find a new bubble. I propose alternative energy as a good candidate.
I agree with the above poster...this thread has been fascinating. I will share what I am seeing in the market I am looking in.
I have been looking at vacation condos in a southern Maine coastal area. Currently, there are double the number of condos on the market than sold in the entire year of 2008. One complex that I like has about a dozen units for sale. Some have been for sale for well over a year.
I have used various web resources, like the assesors data base, to find who owns each unit, and how much they paid for them. What I have noticed is that those who bought at "bubble" prices have set pricing for the entire complex. I certainly don't blame owners for not reducing their prices, if the guy next door can sell for a higher price, why shouldn't they? Yet, some of these folks who bought pre-bubble 10-12 years ago expect to make 3 times what they paid for the unit...even though, for close to that price now, you can buy in a nicer complex, with ocean views, or closer to the beach.
So, it seems like a waiting game.....it will be interesting to see which, if any, owner "breaks", and drops their price to sell. I suspect if the summer rental market isn't strong, it could happen this summer. Other posters have mentioned that prices are "sticky" on the way down, and that is exactly what I am seeing.
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