The best time to buy a home

Purchased home in Florida in 2005 for 159, got a transfer in 2008 and had to put it up for sale. It took 8 months, and sold for 124… Were never late on payments, VA took care of deficit, credit stays clean.

Now we live in OK, Forbes mentioned one of the best places in the US housing market wise. We are ready to buy again, need something larger and nicer (than this dump). Have good credit, can probably get FHA at 5.5 or 6 locally, found a house we like with a monthly payment we can afford.

Work for defense company that is running out of contracts and was going to get laid off at the end of the year. Just got hired by a very large nationwide company for staff position (work that is not based on defense contracts they rake in), same salary, better benefits.

Should we buy now? Looking to stay in house for 5 years (if not more).

Well, that is true, any time is a good time to make transaction and commission. But whehter it is a good time to buy, you need to be careful.

There's never a bad time to buy a home. The statement is true as long as one caveat is met: The home will be owned for a substantial period of time. The people who are "underwater" are that way because they use loans not meant for residential purposes to buy homes they could NOT afford.

The tax break alone creates a substantial savings for the normal American family. Additionally, if the house is held long enough the owner will be able to sell it. This housing slump is unprecedented in SCALE but not in fundamentals. The economy will bounce back (as it always has), and people out there making INFORMED and RATIONAL deals will be making money… mainly off the "chicken little"s out there.

Buying a Home is a Great thing. If it were such a horrible time to buy why are there so many investors buying homes right now? 6 months ago even 4 months ago. Investors were not even thinking about buying! Now I have investors buying homes all over the place. If investors are buying that is a signal that indicates a market leveling off. Not to mention all the properties I am seeing with multipule offers on them. Buying home now is not a bad thing if it is the home you want and a price you can get financed. PERIOD… Long Term Home Ownership always is safe.

I live in the Virginia suburbs of DC. I believe for those of us buyers waiting to time the bottom, our efforts will be futile. There are so many homes on the market in such terrible condition (i.e. no kitchens or bathroom appliances) creating a massive inventory very difficult to exhaust. By the time the "bottom" is reached so many buyers on the sidelines will flood the market, forcing prices up again. I have already seen this occur with well-priced foreclosures and buyers bidding up the price $50K more than the asking price. So I believe if one does her research there's an ability to find a well priced house now, scoop it up, live in it 5+ years and enjoy not being underwater.

Happy House Hunting!

Housing prices rise with inflation. With all the money the government has dumped into our economy we are sure to see inflation in the short term.

Location. Location. Location.

All I can tell you is now is a pretty good time to buy, in San Francisco, at least. I've been looking for months to buy a house and they're snatched up like hotcakes. Not only that, they get multiple offers and are overbid. WTF?!?! I placed an offer over the asking price w/ 33% down and it was rejected by the bank. Got outbid! I know we're in a housing slump but it's business as usual over here in SF.

I'll just have to keep looking and move faster next time. I thought we are in one of the worst housing and financial crises in decades. Sure doesn't seem like it here.

I Sold a house in 2006 for 269,900.00 The buyers added 200 sq ft and it sold in june for 223,500.00. I'll bet new owners wont be able to gettheir moneyout fo a LONG time.

John Parsippany…if you read the article carefully, writer clearly states that if you plan on living on your home at least 5 years, you should be ok. That's most always the case even in the worst economic times, especially with a 30year conventional loan (& not the exotic loans that most people got into & did not understand). Keep in mind that the run-up in prices during the bubble was such in some areas, that even if you bought a home now & this same home lost another 20% like some experts predict in the coming year, market value could still be higher than it was four years ago. I'll give you an example: In parts of the southeast, you could purchase a 3bed / 2 1/2 bath, 1600 sq.ft home for $160K in late 2003; this same home was going for $290K just 2 years later! With prices coming down dramatically, this home now sells for $225K, & assuming another 20% drop in 2009, you're still @ approx. $180K. Like writer says, you'll Never be able to time the bottom, but if you plan to use your home as a home, & not simply a SHORT TERM investment vehicle, you should be fine.

This credit and housing crisis is actually a good lesson for us. It's teaching us to go back to the basics, buy what you can afford, pay cash when you can, save for the future. I know it's bad across our nation, but maybe we will finally get it. Do we really think it's a smart idea to pull equity out of our biggest asset to purchase that 3rd car? or go on vacation?
It's such an unfortunate situation, but we are a strong group of people and I know we'll get through this.

Wow John, I bet you voted democrat….poor 12m people who knew they were buying more house than they could afford and now *gasp* they are paying for it!! If anything the writer here stresses making an EDUCATED buy.

I am on the market myself to get a house. I am watching prices for properties that I am tracking to go down and my cash go up. I was thinking of buying upcoming Summer but now thinking of wating longer simply because even if market will stabilize in one area, it will continue to fall in another.

There's never a bad time to purchase a home?

Really?

Tell that to the record number (currently estimated at 12 million) of homeowners who’s mortgages are “underwater” — that is, those who owe more on their mortgages than the homes are worth. The number is still growing and expected to reach 15 million sometime in 2009, so there are bad times to purchase a home. And unfortunately, these underwater mortgages are on the brink of default.

The current housing slump is precedent-setting and there are no experts who can predict what will happen next – not even come close.

While I don't know if it is a good time to buy, it is always a great time to generate a comission for a Real Estate agent.

Bottom line is this..

"There is never a bad time to purchase a home, rather, only bad times to sell a home".

If you are able to hold the residence long enough, history has proven you will come ahead. History has proven, residential home purchase(s) are an excellent and stable vehichle of investment (cavaet being, you purchase a home correctly, i.e. not out in the middle of BFE Arizona, not overbuilt for the area, etc).

So, let all the "chicken littles" and "nay-sayers" have their brief moment in history (relatively speaking ofcourse) to rant a rave about how this is then end of civilization as we know it.

They will be the same folks stating in the future, "if only I can catch a break".

So I Say, go purchase your home and be happy. As long as you can afford the payment you will enjoy an investment that is…well…your very own.

have fun!

I would have to disagree with the post below about how housing prices will take many, many, many years to get back to their peak. In most of the U.S. that will be true but in certain markets, say around L.A. or the suburbs around D.C., the turn around in prices will probably only take a few years.

The largest factor for growth in these markets during the boom was do the fact that there just wasn't anymore land left to build on. These are also the same areas with strong population growth do to their geographic location and strong economies. So I would say its safe to predict that after this current little supply glut is eaten up, it will result in prices quickly jumping back on board the demand driven express train.

This isn't just my opinion. I recently went to leading housing market forecast in the D.C./Baltimore area and what I am echoing was a combination of points made by several really intelligent speakers.

So I guess what I am trying to say is, yes the market and economy are scary right now and they will be through most of 2009. However, 2010 looks to be the light at the end of the tunnel, and in certain areas that light is going to get pretty bright…pretty fast.

Two things:

First, for those who are looking to buy, do not worry about missing out buying at rock bottom prices because, when the housing market reaches the bottom, the next step will be to wait for the climb — it will not be instantaneous.

Second, for those who are expecting housing prices to come back even close to it's peak, the same freud in banking, Wall Street and real estate would have to occur but which isn't going to occur because of the new policies — so housing prices will not come back for many, many, many years.

Given this, nothing bought before the bottom is reached will gain equity for years — no matter what deal you get.

First of all, it depends where you are, what kind of home it is and what condition it is in. I sold my Westchester, NY town house last July. It took just 5 weeks to sell, I only had to drop my asking price by $30k and it sold for about 10% less than the absolute market high.

There are some markets which totally over-heated such as LA, Phoenix or Las Vegas. But there are others, such as the New York area where prices have held up much better. So a buying or selling strategy needs to take account of these factors.

Finally, it depends why you are buying. I have never bought for investment; it was always somewhere to live. As a result, I have always made money because I have lived in them long enough. If I was investing, no way I would buy for at least another year. The economy hasn't even begun to shed jobs yet and, in my view it will get a lot worse. So prices are going to continue to decline for a while yet.

I think timing the max in housing is very difficult due to its sharp peak; however, housing tends to recover from the bottom VERY slowly. (See past bubble cycle of early 90s.) Even after house prices level off you can buy a couple of years later and you won't have missed out because of the slow initial appreciation. I agree that you shouldn't time the exact bottom, but let it bottom and start to RECOVER before you buy and you'll do great.

Updegrave:
> I don’t think it’s possible to time the housing market any more than it is to time the stock market.

House prices are much more sticky than stock prices that can have wild swings. You can time the housing market, and the timing says that you shouldn't buy yet. If you do anyhow, be prepared to live a long time in your house or to come with a check when you sell it.

We are ready to purchase a home and are currently looking in the area. We have agreed to wait since we keep running into the same problem. Unfortunately, houses are not appraising for what sellers are asking. We have put in multiple offers for multiple houses and have agreed on prices. After doing the appraisal and finding out the homes are worth a lot less than we offered is causing us to lose offers since we cannot receive a loan that is worth more than the value of the house, and after talking to the seller, they are not willing to drop their price further. Long story short, find legitimate comparable sales in the area before submitting offers. Short sales and foreclosures have devastated the value of homes in the Sacramento area. Many of these homes are down 100K-200K!

This is a great time to purchase a home if you will be living in it for the next several years. Do not worry that prices may drop further as the market will rebound in the future.

The foreclosures are all the junk the banks want to get rid of. Wait a few years, you can get your realtors house, or the bankers house, or the stock brokers house, etc, etc, for cheap. They have much nicer houses than the subprime you are seeing now. You have to be patient, they have to burn through savings, 401K, bankruptcy, etc–delaying the invevitable. Most should be broke by 2012.

"Good luck buying in California.
Most of the listings are Short Sales or REO, and the banks take months to respond to anything regarding their listings.

Posted By Lara Sipp, Mission Viejo, CA: November 5, 2008 6:49 pm "

I second that. I've been trying for the past 6 months, no luck. There's a whole lot people that stood on the sidlines and were not foolish enough to pay over inflated prices. Now they just simply pay cash that they saved up. I've been outbidded by someone who put more than 50% down several times. Apparently someone forgot to tell homebuyers in Southern Cal that there's a financial crisis.

the most important thing that our "expert"didn't addressed, is that it doesn't matter anymore if the general public can afford buying a new house or pay the mortgage payments, the real issue is that the amount of bad credited citizens is climbing exponentially, and the system of the credit be rue is what's gone put us down (financially) as a country.
all those millions of citizens that had the misfortune of loosing there homes or declare bankruptcy, are out of the picture for many years to come as a home purchasers.

Each area of the country is going to have a different story when it comes to housing, affordability, and timing of the market recovery (AKA correction). Those who are thinking as a home purely as an investment probably can hold onto their money for a few years until they think they can start making short term gains off the housing market. Those who would like a roof over their head, a place to call their own, and a long term financial opportunity. The ups and downs of the housing market should have little effect if you are conservative in your thinking. Buy a home you can afford today and over the next few years (expect the unexpected). Don't use your home as a bank or credit card – the equity in the home should only be treated as a financial gain only once the property is sold.

The best time to buy a home is when you feel comfortable with the purchase and are able to ride the housing ups and downs. There are still many markets in the nation that it does make sense to purchase a home now rather than rent – each individual's situation/needs will be different.

If you have good credit, a downpayment, and the desire to own and maintain your home – now is the time to buy. Or…anytime before the next seller's market.

Real estate is a highly localized thing. The Denver market has had affordability restored and has seen appreciation in some areas because of this. There are only a few areas where affordability has been restored. Buying in those areas now is good.

The places that were overbuilt and where prices rose the most still have room to fall, so now is not the time to buy if you are looking short term.

To Susan from NJ. Just because your selling your home at the price you bought it for does not mean it is a good deal. What is the value of the home? What are homes in your area selling for? What are the comparables selling for?

With the tight credit out there people are going to have to come up with some kind of down payment in order to purchase a house. If a bank wants a 20% down payment that means a buyer has to come up with $60k for a $300k house. Not many buyers have that kind of cash lying around. Not when people got used to 100% financing. Even if you put down 10% that is still $30k, with the savings rate in this country, not many people have that kind of cash and those who do arent looking to buy homes.

Because of this look for prices to fall further until people can afford down payments.

Bought my first Property in 1988 after the stock market crash. for $135,000, the next four years I was under water. Today that property is worth $850,000 in a bad market.
Bought my second home in 2001 for $295,000, today in a bad market that home is worth approx. $895,000.
I have friends that have been renting and looking for a bottom since the day I purchased my first property in 1988.

Prices took a dive last year here, but have held firm since around March. We have definitely hit a floor. For all the talk of foreclosures, they are not affecting all neighborhoods equally. This makes the Case Shiller index argument completely worthless.

Why would you listen to this guy?
You CAN predict when housing has reached bottom. It's really easy too. Just plot the Case-Shiller home price index data. (free at the S&P website) Look at the point where it settles back down to its 100 year "normal trend" That's around 2011-2012.
There I just pushed the EASY button for you.

Definitely now is NOT a good time to purchase a home. There's approximately 20% more price depreciation that needs to happen in most areas of the country before the market pricing stabilizes.

Do the practical things; i.e., if its still cheaper to rent that it is to buy in a given area — then simply keep your cash and continue renting.

Cash is king right now and for the forseable future. We're turning into more of a cash economy so be cash wise; stash it for the time being. Your dream house will still materialize when you really need (and can afford) it.

Too many homeowners owe more than what the homes are worth. In Las Vegas, Phoenix, Florida and many other areas people owe more money on thier homes than they are worth exceed over 40%. People are now hostage in their own home because home values are below what they owe. We will not a see a positive home market for 8 to 10 years.

I work in a real estate office.
Buyers come in all the time asking for foreclosure lists and "Great Deals" meaning someone who is in trouble.
they watch these foreclosure infomercials on TV and want to score.
When you show them what is being foreclosed on or really great deals they are disappointed because these properties need a lot of work or are in undesirable neighborhoods, and are not something even when fixed up that they see themselves happy to live in.
A lot of real estate came on the market in the last two years, but sorry to say a lot of properties are not desirable to Live in at any price.

Keep in mind, before the housing market really started to sink, statistics indicated about one third of all houses sold within the last three years were by investors looking to make a buck and not a home of it. These investors drove prices to unrealistic values.

There will be a strong demand for housing in the next few years. Our demographics (think all of the immigration that has taken place) and the fact that the US creates about one million new housholds a year, will continue to create value in home ownership. And, they just don't make land anymore in urban areas (think limited supply to build on).

The biggest factor holding all this back right now is the unstable job market. The prices have collapsed enough that all we need is cash now and in ample supply (think job growth).

Look for growth in the later half of 2009.

Housing is definitely not like the stock market; a house is much easier to buy than it is to sell. A condo is very easy to buy and almost impossible to sell.

The median price is still quite a bit out of reach of the median income; historically, a 4x ratio has been stable. We're getting closer, but we're not back down to normal, yet.

If you go to buy, do so with the intention to live there for a long time; you won't become a real estate tycoon, like lots of people thought as recently as 1-2 years ago. Check the pre-bubble sale at the tax office and offer maybe 2% per year price inflation. If the seller doesn't like it, keep walking. There are many new and used houses for sale.

I just bought a house in the metro Detroit area.
In 2006 it was worth 330,000. Last month I bought it for 245,000.
Was not a foreclosure or short sale, it was just a normal sale.
The mortgage was a FHA at 6.25% through Fifth Third, only had to put down 3%.
I'd say….BUY NOW! The market will bounce back in about 4 years.

While some buyers surely are greedy these days John in DC, I find the lamentations of home owners rather amusing considering the market for the past 8-10 years. 20-50k/yr in appreciation is not the norm and has been pretty unprecedented in US RE market history.

Good time to buy in thus area. Existing home prices are at or near the current cost of replacement (ie. buy the lot and build the same house). Plus, people are still relocating here at a steady pace from other states. With inflation looming, interest rates are bound to rise. If you read the experts, they are expecting 7%+ rates a year or two out. Prices here will not likely decrease very much more and the interest rates are probably as good as they are going to get over the next several years. If you are going to settle in for 5 yrs+ (no flips), it is a great opportunity.

Housing is not like the stock market. Home prices are not going to bottom out, then zoom back up the next day. They will stagnate and flatten out for a period, then 'revert to the mean' (meaning housing prices will go back to their non-bubble modest annual increases). You can definitely wait til after the bottom to find a home. The bubble is not coming back.

My partner and I have been trying to buy a home since January. We first put an offer in on a new town home that never got built, 3 months later. We then made an offer on a house and got outbid. A few months ago we put an offer in on a new foreclosed loft condo. At this point the developer's banks have approved the deal and we are just waiting for the PMI company to approve the building. We are well qualified borrowers but keep running into bad luck. Hopefully we'll be in by the end of the year!

To many "Flip This House" shows and news media are making buyers pretty unreasonable nowadays.

My house is priced at what I owe for it just to get rid of it and get moving on building our future home. It's a great home, very large, in a fantastic neighbor in an even better school district.

We aren't looking to make a profit we just want it gone and still nothing.

I think there are many people out there with unrealistic value of their homes.

It is interesting. Buyers think its a buyers market, sellers/owners think the market is okay.

As a buyer and apartment renter, I think prices need to drop another 10% on listing price before I can get an equiv. home at the same relative cost as renting.

The bubble in DC areas is huge. Sellers who have owned the house for a couple of years are making more than 100% gains. And you call the buyers greedy? Tell me about it!

John, I am very sorry to inform you this is NOT a seller's market. Your house is not worth what you think but what a buyer is willing and able to pay. You can always sell in 5 years when inflation will catch up your wishing price.

It's still a horrible time to buy in most metro areas, at least until prices get to 1997 levels.

I'm renting a $1M home in the SF bay area for $3K. The homes here depreciate 1-3% per month. I could afford to buy the home, but it makes no sense. The payment would be $7,500, the downpayment would be $200K, and assuming a 2% depreciation per month I would lose $20,000 per month of my downpayment investment.

Bill

I think home prices are still too inflated. I have been watching a beautiful colonial in MN. It started on the market at $550,000 and after a few months dropped to $520,000. I then checked the online records of the property at the tax assessors site and found this property was purchased in 2002 for 359,900. Even at the now "discounted" rate of $520,000, this seems very high given the fact the purchased it for so much less, just 6 years ago. I think prices need to drop more to correct the market that was so over-inflated these last few years.

To John in DC (1st post)- By not doing the deal you just turned down over $10K, your house may be on the market for another year. So don't complain. You did it to yourself.

Closed on a bank forclosure in August 08. It listed for 565k and was able to negotiate 500k and closing costs paid for (13k). I've been searching for 2yrs before I offerred and it is definetly a buyers market in Sacramento/Northern California and continues to trend that way. Have your agent give you a list of comparable sales or comparable appraisals to establish a base-line offer and then move up or down according to the specific property attributes.

Good luck buying in California.
Most of the listings are Short Sales or REO, and the banks take months to respond to anything regarding their listings.

Assuming buyers cannot time their purchases exactly at "the bottom", it is probably better to err on the side of too early rather than too late. In declining markets, buyers will have more choice and negotiating leverage. Buyers would serve themselves well by purchasing when markets are complacent, interest rates are low and inventory plentiful. If the mortgage you are looking at fits within your budget, you are in it for the long haul, and you are not in one of those overheated markets (or cities in severe industrial decline), the time to buy is now or very soon. If buyers wait until after "the bottom", in a rising market they could face more competition from other bidders, fewer choices, and possibly higher interest rates. Long term buyers who are acquiring a permanent residence have little reason to wait until after a bottom is evident.

No offense to those who just bought recently, but now is still not the best time to buy a home. The country is about to enter a recession and the housing market is at a 5+ year low. Why take on extra risk now when it is very likely you can get the same house for less in a year and not have to worry if your company will be having layoffs right after you close on a house.

It's great time to buy a house… I just lowered my price from $530k to $210k 4bedrm and 2bath in Garden Grove Ca. My house is on the market for about 9 months now and finally getting some offers!

Now is a great time to buy..I lowered the price of my home $80K over the last
12 months..House is in pristine condition.Whole house freshly painted,
new SS appl.,landscaping etc. Buyer
offered full price but wanted me to pay all closing costs–$20K and 6% sales comm.- about 21K ..I offered
$11K closing help..No deal..KNOW it's
a seller's mrkt, but alot of buyers
are getting greedy ..They want your
house for nothing .. I live in the
DC metro area ..

I'm in the process of buying my first home – I close this Friday. Even with some difficulties on my credit 6 years ago (repo, settled credit cards, etc) I didn't have any problem getting an FHA loan for more than I needed. I found a house that's been on the market for over 2 months without an offer. With a great buyers agent, I was able to get the house for about $5k less than asking, seller is paying all closing costs, and also paying for the first year's home warranty, as well as making some minor repairs before closing. It's been a great time to buy for me!

I've seen in the last two weeks home prices raised in our area of Southern New Jersey, Hammonton to be exact. We are however a unique community that sits nicely 30 miles from Philly and 30 miles from Atlantic City. We also haven't see a tax increase in two years and have a fantastic school district. I believe these are important factors into why we aren't doing as poorly as other parts of the country.