Best Time To Buy In 4 Years

This entry was posted on 3/5/2008 9:06 AM and is filed under uncategorized.

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• 3/30/2008 8:36 PM John DuPonte wrote:
  What a crock! Right now is definitely NOT the best time to buy. Only a real-estate professional or mortgage businessman would say this. The numbers are staggering. A new waive of foreclosures is on its way -- both subprime AND prime related. Whoever buys right now is making the wrong decision. UCLA economists say we won't hit bottom until 2010, or maybe after. Imagine what prices will be like at that time. Everyone is waiting to buy a home until then, but nobody in the real-estate or mortgage business will admit it, because their financing for their BMWs depend on it.
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  1. 3/31/2008 7:10 AM Christopher Mulder wrote:
     Thanks for contributing John.  The post with which you replied to contained a link showing that CNN was actually who said that now is the best time to buy in four years, which would be true given that prices now, on foreclosed and short sale homes, are lower than they were priced at roughly 4 years ago.  So yes, now is the best time in the past 4 years to buy.  
     
     
     It was not about an opinion from a real estate agent or a mortgage businessman.  Now will prices go much lower?  I think on person to person sales yes, they will because those individuals have to catch up to the prices of bank owned homes.  Will the bank owned homes be less as well?  Probably but by how much.  At the moment there are some bank owned homes that ARE VERY inexpensive right now and as such they have 30 to 40 offers on them when they hit the market.  Those are super aggressively priced homes.  In my opinion those are priced at the bottom already.  The problem is, it's difficult for an agent to convince a bank to price it that low right from the get go so only a few homes are that low now.  One of the important things to remember when purchasing a home is this, will the loan program that I need to purchase a home be around when I finally "decide" that we've hit "the bottom."  To be honest with you, some people might literally miss the boat by waiting longer and may not be able to purchase for a very very long time until a loan program comes back that will qualify them, especially self employed stated income programs.  I know this to be true because I have clients that can't be qualified today but could have been a month ago.  The down payment requirements for them continue to increase.  
     
     
     Then there's also the fact that a 30 year fixed right now is at 5.5%!  Because of the inflation that this country will experience as a result of oil prices and the cutting of the rates so much by the Fed, there is a good chance that by 2010 we could be seeing 7%+ in a 30 year fixed interest rate, and if your goal is own your home, that may be as costly as purchasing at a higher price in 2008, not to mention the lack of a tax deduction for those 2 years.  

     
     

     Just my 2 cents. 

     
     

     Chris

     HomeQuest Financial
     
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     1. 4/4/2008 7:25 PM John DuPonte wrote:
        You say, according to a CNN story, that now is the best time to buy in the last 4 years -- and you're correct.
        
        But are the last 4 years a good comparison? Nope -- not at all.
        
        The last four years have brought a mega-inflated market never before seen. So it's useless to ask yourself whether to buy a house right now if you're comparing current prices with prices over the last 4 years.
        
        All I know is: No one I personally know who wants to buy a home right now will succumb to these current prices. It's a tug of war and will continue to be for a long time.
        
        Both you and I know that we're not at the bottom of the barrel yet.
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  2. 4/9/2008 5:58 AM Rachel McGuire wrote:
     You could not be more wrong in this situation. Here is what I think; buy it now! If you plan on buying a new home, plan on being in that home for a few years, and can qualify for that new home without over extending yourself, then I think you should do it. Many brokers don’t agree saying that you could lose a lot of money. For instance, if you put 30% down on your home and the housing market falls 15%, you have lost half your investment. Yes, this is true, but if you plan on staying in your home for a few years, you can wait out this down turn. If you are scarred of this happening, offer 10% - 15% below asking price to compensate for any lose you feel you may consume. It is important to remember that the market is constantly fluctuating and today your house may be worth a little less than it did yesterday or vice-versa.
     
     These days’ homes on average tend to be on the market for a longer period of time. This is a huge advantage to the buyer in that the seller will often consider your offer and most likely counter do to the fact that their home has been sitting on the market for some time now and they are ready to move it. This creates a situation in which the buyer and seller end up with a deal that makes them both happy.
     
     Like I mentioned earlier if you are buying a house in the market today, you are probably going to get a remarkable deal on the house and in the future, the home will increase in value as the market goes back up.
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     1. 4/11/2008 8:57 AM Christopher Mulder wrote:
        Good advice.  Out here in the Inland Empire I'm seeing bank owned homes going for half of what they sold for just 1.5 to 2 years ago.  These bank owned homes however have upwards of 10, 20, even 35+ offers on them.  That is to me is an indication that when homes are at that particular level, buyers will come out of the woodwork to purchase making that roughly the bottom point. 
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     2. 4/11/2008 8:02 PM John DuPonte wrote:
        Actually Rachel, I couldn't be more correct. In fact, your "Buy now!" advice is the worst advice you could give a potential home buyer.
        
        Check this out:
        
        1) "Last cycle, Los Angeles dropped over 40 percent in real inflation-corrected terms between its peak in 1989 and bottom in 1997. There could be more such extreme cases this time." -- Robert Shiller, Yale University economics professor and co-developer of the S&P/Case-Shiller Home Price Index
        
        2) "I expect house prices nationwide to fall around 30 percent from their 2007 peaks after adjusting for inflation." -- Dean Baker, co-director of the Center for Economic and Policy Research
        
        3) "Home prices nationally could come down another 8 to 12 percent." -- Steven Roth, chairman and CEO of Vornado Realty Trust
        
        These are real quotes (courtesy of Portfolio Business Intelligence magazine) from well-regarded real-estate experts.
        
        They've seen enough real-estate cycles to know this much: even though home values in some areas are almost half of what they were 3 or 4 years ago, that fact doesn't mean it's a good time to buy.
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• 4/29/2008 9:33 PM John DuPonte wrote:
  Why haven't you posted my last response? Isn't this a forum of ideas?
  
  -John
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  1. 4/30/2008 9:41 AM Christopher Mulder wrote:
     Sorry about that John.  Thanks for the reminder.  I've been pretty busy as of late.  Thanks for your participation on the blog.
     
     Chris
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