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Robert J. Gaffney's Blog

By Robert J. Gaffney - Mountain Resort Properties, Inc @ Crystal Springs | Agent in Harmony Corners, NY

Should I buy a house now or wait till prices hit bottom?

No one has a crystal ball to determine when is the best time to purchase a home. Many in the media and financial institutions would have you believe they know when the time is right. I'm sure clients of Bernie Mahoff thought they were getting the best, up to the minute stock and mutual fund information that money could buy. Unfortunately, the only thing the money they were investing with Mahoff was buying was expensive cars, jewelry and multiple properties for Mahoff. How did that work out for you? 

The only thing you can do as a potential home buyer is trust yourself.  Only you can determine the best time to buy a home according to your own financial and personal situation. As long as your head is not next on the chopping block at work, you have enough money to cover closing costs and down payment and your happy with the choice of home you picked out of the many homes that are on the market is when you should take the plunge to purchase a property.

Take it from someone that has been working in this real estate market for the past fifteen years, I've been through the ups and downs, the mid 90's were good, the late 90's were great, but the market we have today started roughly in 2005 when the banks were forced, by the government, to provide housing for low income buyers. The government told the banks and mortgage company's give loans to low income buyer's. Now, I'm sure the banks and mortgage company's either heard, "or else" or interpreted some other meaning to what was said, but nevertheless, the flood gates were opened, the water's were parted and the sky opened up to the real estate and mortgage market we see today. 

The government already has Fannie Mae and Freddie Mac, putting those in the government  in the mortgage business. I just can't wait to see the day that Obama is carting client's around in the White House limosine, attending Open House's and writing contract's posing as a Realtor. Well, wouldn't that be the next step? Well he was a community organizer. Yeah, community organizer, Senator, President of the United States then Realtor, makes sense, doesn't it? I wonder, was Obama ever an Amway salesman? Anyway, you get the idea.

If you need any further assistance in any real estate transaction or information I would be glad to help you, just give me a call. By the way, I hope you enjoyed the article, let us know if you have any input that could be helpful.

Robert J Gaffney - Sales Executive
Leisure Land & Properties Realty
Off: 973-293-3267
Fax: 973-293-3567
Cell: 570-228-9126 (primary)
e-mail: robertjgaffney@hotmail.com
Url: www.robertjgaffney.com

Comments

By Brad Ullmann,  Thu Jul 15 2010, 11:28
Home Buying in Newton,

It is definately a buyers market. If you wait for prices to" hit bottom" then you would be in a sellers market and during a sellers market they generally go up. My professional opinion home pricing will go up and down slightly for sometime, Hopefully people aren't of the opinion that home prices are going to come down alot more. Hope this was helpful, and if you have any further questions I would be happy to help.
Brad Ullmann
Broker
Triple Crown Realtors
973-383-8800
By NonRealtor,  Thu Jul 15 2010, 11:59
Wait to buy. Why hurry? When we finally reach the bottom, we'll be there for a long time. Good Luck
By Jerry,  Thu Jul 15 2010, 12:08
I do not believe we will be at the bottom for a long time when we get there. We might be there for a time, not so long as to turn hopeful buyers away.
By Jerry,  Thu Jul 15 2010, 12:16
Robert G. : I wanted to remind you that 2005 as not during the time of this president. It was the time of Mr. Bush. Its not that I blame Mr. Bush, just want to show that so much that "was done," happened during the last administration. Mr. bush himself was not able as a human being to create such staggering deficits all on his own. He had a vice pres. to help him.
By Voices Member,  Thu Jul 15 2010, 12:39
Best Robert to wait until the dust settles, market hits bottom. Right now, the Chickens have come home to roost. Richie
Hi Non Realtor, Jerry and Voices Member. Well, it's been a while since I wrote the main post, but all that was written still rings true. Like I said on the original post, "The only thing you can do as a potential home buyer is trust yourself. Only you can determine the best time to buy a home according to your own financial and personal situation. As long as your head is not next on the chopping block at work, you have enough money to cover closing costs and down payment and your happy with the choice of home you picked out of the many homes that are on the market is when you should take the plunge to purchase a property."

Although, the market we are in is still a bad one, why wait? When you realize it has hit rock bottom, generally it's on it's way back up. It's just like the stock market, goes in cycles. Yes, it may be a slow rise, but once it's on the rise it may be too late. My philosophy is, why wait today for a discount on a property, when you can take advantage of it now?

I believe, when the market returns to normal, it will be a fast paced ride to the top. Not really the time to start a search for a new property and definitely not the time for a bargain.

I've recently moved from my former real estate office to the company I am in now, because of the current market conditions. Unfortunately, people will lose homes to foreclosure, which is the reason I made the move to Mountain Resort Properties, Inc. I now am located in the Short Sale division of the company, because I want to be a part of the reconstruction of the American Dream. Yes, it's unfortunate to lose a home, but just before they have to go into foreclosure I can help them out of the financial difficulties by doing a Short Sale. There credit isn't completely destroyed and they can come back in two years to re-purchase a new home, if that's what they want to do. Anyone that desires more information on the Short Sale process can contact me through my cell phone # at 570-228-9126.

The Short Sale process helps those owners that have just went into pre-foreclosure and realize they need to get out of the financial situation, while they have the chance and possibly walk away from a property with no debt to the bank or mortgage company, as well as, being able to re-purchase a property in a fairly short period of time.. On the other hand, the buyer can purchase a property, in good condition, through a Short Sale at a discounted price.

With many, many properties going into foreclosure these days eventually, the real estate market will be flooded with Short Sales, not something a novice should enter into without an experienced real estate agent.
Again, only you can decide when to purchase a property and if the time is right for you, but now you know who can help you when the time comes.

Take care.

Robert J Gaffney
Mountain Resort Properties, Inc
48 Sugar Maple Lane
Hardyston, NJ 07419
Off: 973-823-1293
Fax: 973-823-0088
Cell: 570-228-9126 (direct contact)
e-mail: rgaffney@crystalspringsbuilders.com
url: http://www.crystalspringsbuilders.com - http://www.mrphomes.com - http://www.robertjgaffney.com
Home prices is only one part of the Buying Cost as a home buyer. Interest rate is the other main part.

As home sellers are mostly concern with the bottom line or the Price they can get, home buyers as well should be concern with their bottom line or the monthly cost they can afford. Interest rates have been on the rise for a while now. Every time the rates rise it simply decreases one's purchasing power or increase the monthly payment for same loan amount.

What do you think is going to cost much more over time? Buying a $350,000 home with a 5% interest rate or buying that same home at $325,000 with a 6% interest rate.
Hi Cathy, that's a great point, I agree 100%. A lot of times buyers never look at purchasing a home like an investment. No matter what you're buying the property for, personal residence, income producing property or whatever your need will be. You need to always look at purchasing real estate as an investment and you ALWAYS need to look at the bottom line. In your example, the difference of 1% in interest, no matter how much the ultimate cost of the property, can effect greatly toward the life of the loan.
Take care.

Robert J Gaffney
Mountain Resort Properties, Inc
48 Sugar Maple Lane
Hardyston, NJ 07419
Off: 973-823-1293
Fax: 973-823-0088
Cell: 570-228-9126 (direct contact)
e-mail: rgaffney@crystalspringsbuilders.com
url: http://www.crystalspringsbuilders.com - http://www.mrphomes.com - http://www.robertjgaffney.com
Hi Anthony, Don't let anyone kid you. No one has a crystal ball and if they did, I doubt that they would be sharing it with anybody. Those people that are listening to the experts that say the "bottom" is 6 months out and believe it will be disappointed. I believe, the end of the tunnel is quite far in the future. It took a few years for us to get here and it will take a few more to correct itself.

It all started around 2007, I don't want to say that "bottom" is here or around the corner, but it has eased somewhat. Yes, there are buyers purchasing homes out there. Among those eligible buyers that are still employed with savings for down payments and realistically, this is the time to buy if you are able.

Once you realize that "bottom" has hit, it's probably too late. It works like the Stock Market, if everyone knew when was the time to buy and sell stocks, trading in the market wouldn't still be called "RISKY".

The moral of the story is, you have to realize when the real estate market has hit bottom, not there bottom, but your bottom. Only you know when the best time for you is to buy.

Robert J Gaffney
Mountain Resort Properties, Inc
48 Sugar Maple Lane
Hardyston, NJ 07419
Off: 973-823-1293
Fax: 973-823-0088
Cell: 570-228-9126 (direct contact)
e-mail: rgaffney@crystalspringsbuilders.com
url: http://www.crystalspringsbuilders.com - http://www.mrphomes.com - http://www.robertjgaffney.com
By Marianne Bandy,  Sat Jan 22 2011, 20:33
The only way to tell when a bottom has been hit is by looking back on it. Which means by the time you realize there has been a bottom, prices are heading up, demand is up, and most likely interest rates are up. Markets are always local, but here in Denver buyers seem to be getting the message that the time to buy is now.
Hi Marianne, I agree. Like I told Anthony prior to the post that you put up, the "BOTTOM" is relative to who is the one waiting for the bottom. Anthony's bottom might be different than an investor's bottom. I know, it sounds a little funny, but you understand. I still haven't figured out why people are waiting for this mysterious "BOTTOM" anyway.

It all depends on how much of a discount you are prepared to purchase a property for. Like I mentioned to Cathy, prior to your post, buyers need to look at purchasing a residential home through the eyes of an investor. How much of a discount do I want to wait for. Do I buy at a 30%, a 20% or a 10% discount? Or do I hold out, take a chance and wait for a 50% discount below wholesale.

I guess what I'm saying is, buyers need to have a plan in place before entering the real estate market, especially this one, if they're looking for a discounted price.

Robert J Gaffney
Mountain Resort Properties, Inc
48 Sugar Maple Lane
Hardyston, NJ 07419
Off: 973-823-1293
Fax: 973-823-0088
Cell: 570-228-9126 (direct contact)
e-mail: rgaffney@crystalspringsbuilders.com
url: http://www.crystalspringsbuilders.com - http://www.mrphomes.com - http://www.robertjgaffney.com
Yes Marianne is making a good point. No matter the recovery graphing model that will develop (V shape versus U shape, etc..) it is only with the hindsight of time that one can look back and say…if only I bought in 20XX…It might work well on paper but not that well in real life.
By Bev Meaux, Bev and Bob Homes,  Wed Jan 26 2011, 17:20
We will all know when the market in our particular area has hit bottom when we look in our rear view mirror. You won't see it until after the prices go up and you realize, 'hey, that was bottom'. People will always need to but, always need to sell, and some will always need to contemplate. It's a play on prices, taxes and interest rates; not just prices. The prices can stay the same or drop, but if interest rates tick up, you still may have "missed" it. The question is, is it time for your particular situation to make a move.
Yes Beverly, anyone who is on the fence today that can't bring themselves to buy, just because of the many differing opinions that are out there on interest rates coming down even further or home prices haven't hit bottom yet, they will have to decide if it's worth trusting the major networks, newspapers, real estate reports or just simply there gut.

In the end, buyers have to conclude will they wait for the market to come down and hit bottom or get the deal now. After all the dust settles, if the buyer is an investor, all the income potential they could have lost or the first time buyer, the tax benefits that weren't taken advantage of. THE CHOICE IS THERE'S.

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