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Looking at the various markets buying seems to still be up in the air. I read some projections that expect housing prices to drop another 15% this year.
The tax credit ends and I read that interest rates are expected to rise in the second half of 2010. At the same time apartment rentals have dropped $40/month over the past six months. I would like to know what others who can afford to wait are thinking.
Forget about trying to time the market for the bottom ... if the price is right and the numbers make sense, it's the time. You don't know the bottom until it passes, and by then, the price would be on the upswing again. What difference is there buying 10% high before the bottom hits to buying 10% high after you realize that the bottom was reached?
I have a friend who has been waiting for the right time to buy for about 7 years now. In the beginning he didn't want to buy when prices were going up and now he doesn't want to buy when prices are going down.
I bet your friend is glad they did not buy in 2003 to see all their equity and possibly then some erased. They are better off for having not bought, unlike many of us, including me, who bought in 2003 and 2006 (still have both properties). I don't think we will see bottom until 2011 or 2012. It is better to overshoot the bottom than get in too early as prices will bottom out and stay stagnant for awhile before going up.
He and his family aren't happy at all about it. They feel their life has been "put on hold" waiting for the house they want.
People that think that way are just plain silly. How is renting vs buying putting your life on hold?
Buying into emotional cliches like that is how people do really dumb stuff like buy in 2006 because "we are never going to be able to afford a house if we don't buy now".
I really wanted to buy in Los Angeles. In 2001, prices were in a range where it looked like I would be able to afford a small house in a nice area within a couple years. But by 2003, prices had shot up around 70% and there was just no way I could afford. So I just rented. My life wasn't on hold and renting hasn't prevented me in any way from doing anything I want in life. I just kept working and now make 3x the income I made in 2001 and double what I made in 2003.
So now I can stretch and afford a really nice townhome in a really nice area....or I can do what I am doing and wait...continue to save a larger downpayment...and buy in a few years when interest rates are higher(which won't matter because I'll likely have 50%+ downpayment).
Forget about trying to time the market for the bottom ... if the price is right and the numbers make sense, it's the time. You don't know the bottom until it passes, and by then, the price would be on the upswing again. What difference is there buying 10% high before the bottom hits to buying 10% high after you realize that the bottom was reached?
What difference is there buying 10% high before bottom? Well, 10%. $10K on a $100K house. $100K on a million dollar house.
And there is no "buying 10% high AFTER bottom was reached" coming any time soon, FLOL. We're in for a nice sloooooooooooow decline or flatline at best in most markets. Appreciation? I'd say that would be like betting on the Lions to win the SuperBowl...the week before the playoffs and they are 2-14.
But there is plenty more for the shoe to drop in markets that are still substantially overpriced. Most markets in the filler/flyover states, well prices are generally 100K or 200K in most of those parts anyway and appreciate at what, 1 or 2% a year in the best of times? Those markets I could understand buying in if you planned to settle down for 5+ years. But in almost all major metropolitan areas, where properties are still twice or even three times historical ratio norms? We're not done by a longshot.
Looking at the various markets buying seems to still be up in the air. I read some projections that expect housing prices to drop another 15% this year.
The tax credit ends and I read that interest rates are expected to rise in the second half of 2010. At the same time apartment rentals have dropped $40/month over the past six months. I would like to know what others who can afford to wait are thinking.
YES!!! Good Time....you don't want to miss the bottom...perhaps some very bad properties will go lower in price but the better ones are over here already going up in prices...many people just look at the sales price without knowing how they look from the inside.
YES!!! Good Time....you don't want to miss the bottom...perhaps some very bad properties will go lower in price but the better ones are over here already going up in prices...many people just look at the sales price without knowing how they look from the inside.
The notion that you will miss the bottom is insane. Buying housing in the few year window that is within 5% of the bottom one way or the other is just fine.
Its not like housing is gonna bottom and then shoot back up to 2006.
People that think that way are just plain silly. How is renting vs buying putting your life on hold?
I can think of a lot of reasons why people would feel this way.
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Your friend is glad they waited
