Yes it is relative to several factors. What is going on in your market? Is that price point average, high end or just a number someone put on a property? What is the average sold price for similar homes? Is this a second home for you? Would you be impacted by further market adjustments if you were planning to sell the property within a year or two?
If it is a good deal and the numbers work for you, then why gamble on rates going up?
In some of our markets entry level homes have been hit by lending issues. The midpoint is not selling unless priced aggressively and the high end is doing great.
As for buying Real Estate given the health of the market: if you are ready to buy, the best time is when the market is shaky. Everyone has heard it before, but it's easy to forget when in the middle of a soft market. The time to buy is when no one else is. As cliche as that principle is, the general public still wants to buy when values are on the uptick (buyers fear they will get left behind). When things in the market are not so great, they abstain (fear that they are jumping on a sinking ship).
The market will change. It always does. So I would take advantage of the current conditions before that happens.
All joking aside, though..If you are asking about a property in Villanova, you need to look at statistics local to Villanova. Prices in the 2nd Quarter of '07 have dropped by 12.67% compared to last year. The average sale price in Villanova (zip code 19085) for the quarter was $1,085,400, and the the average sold price was 94.8% of the asking price.
Looking county-wide, the 2nd quarter average sale price increased compared to the previous quarter, and the projection is that it will increase in the 3rd Quarter also.
So, to answer your question...I need to ask another question: When prices are down vs last year, but up vs. last quarter, and (projected to continue to rise), what is your risk comfort level?
Looking at a 25 year rolling average, Real Estate values appreciate on average at 5.4% per year. (National average -- it could be more or less in certain regions.) You need to evaluate whether it "makes sense" or not based on your specific goals and specific financing options. You may only be putting 20% of the purchase price down, out of your pocket, but any appreciation will be based on the entire purchase amount. The longer you plan on staying in the home, the less risky the fluctuations in the market will matter to you.
All in all though, with the large number of homes on the market, and mortgage rates near all time lows, you could do much worse than investing in a home now. Keep in mind, though, that a home is not just an investment. It is a place to build memories, to enjoy life with family and friends. If the home is right for you and your family, and you can afford to live there, I echo the "Nike" slogan -- "Just Do It."...with me as your REALTOR ! ;-)
(The reference link is to the Regional Market Report for 2nd Q 2007)
As a couple other agents mentioned on other posts though, some locations have an additional tax for homes over a million and the whole "99"s issue is psychological negotiating stuff. Be sure to look at the percentage of asking price verses sold price for homes in the upper bracket. In Oak Park, IL the overall percentage is around 95% but many of the over $1 mil homes have gone for MORE THAN 80% of the asking price. But if the home is WORTH $1.5mil, there is nothing wrong with paying 100% of asking price.
Do you need to sell YOUR home in order to buy this one you are looking at? That could change the timing issue a lot.
If you have not purchased a property yet, I would highly recommend taking advantage of the market. With interest rates maintaining at an all time low, you get more bang for your buck. Everyone is looking for a good deal and there is always a good deal to be had!
If you are still looking please feel free to call me (610-453-2488) or email me firstname.lastname@example.org
I always tell my buyers not to regret losing out and they will find a better house but one time I had a buyer who ended up paying 60k more for a similar house. A good agent can do the comps and guide you.
Sellers are willing to negotiate these days.You can go to my web site and look up all available homes.
Here is some advice. Are you selling something else in order to buy, going to use a present residence as an investment property or do you presently rent? In other words, what would you compare the cost of buying to in order to determine what to do? The decision to buy or not to buy is a blend of both logic and emotional. There is also, as I perceive from your question, some consternation over the future: what will happen to the interest rates, will prices go up or down, etc.
Here is what I suggest: first, determine the actual cost to buy as well as the relative cost (how your finances will "net" out after you complete the move). This is the logical part. Second, write down what you will gain or lose (not monetarily) by making a move. This is the emotional part.
If you think you have a lender or financial advisor that can predict the future, discuss your plans with them, evaluate all of the information and make a decision and do not second-guess yourself.
Interest rates remain historically low, but qualifications to obtain a loan have steadily tightened over the last several months. For the buyer who has strong credit, resources for a down payment, and anticipates staying in the same home for a few years or more, it is a good time to buy.
If you anticipate moving again in the immediate future, it may not be a good time to buy. Appreciation rates are not anticipated to be strong in most areas, your carrying costs and selling costs could be prohibitive to a short term ownership.
For the move-up buyer who expects to be in the same home for period of time, there is opportunity to buy well. The short term may provide an uptick or further decline. If the game plan is a long term play, buy now. It is impossible to time the market.
It's never a bad time to purchase Real Estate if what you are buying make sense. I agree with Paul, you need to sit down and evaluate all your options. The market in Miami is in your favor and there is a large inventory. So you can make the right choice by seeing the urgency, time listed in the market, condition of the property and the need to sell. If your current finances make sense, then it's the perfect time. Rates should go down some since we are seeing many investors getting out from stocks and into T-Bills, that will lower interest rates, but not much. People will see that the current rates will stay same more or less and begin to buy again. What has really hurt the market is Sub-Prime Buyer who purchased homes with no money down or with low down payment and as a stated loan to qualify. These loans are normally 2 or 3 year fixed rates and when they mature, that montly payment goes up well. Also, most of these buyers waived Escrows so when taxes and insurance is due, that's when they default and can't keep up. SO when you see Foreclosure in the rise, it's mainly smaller purchases. Not too many foreclosures on the high end properties. Rates are still low and on Jumbo Loans. You need to see how long you anticipate to stay at your Million dollar home. Most people purchasing that high tend to stay 10 years and getting between a 5/1 and 10/1 ARM loan.
Bottom line, with a larger inventory, there many more homes to choose from and possibly finding your dream home at a great price. It doesn't hurt to shop as you do not have to buy. Get all the questions answered and make your purchase.
High end Properties from $900K and up, the value on these properties tend to stay stable.
The right agent with due diligence will research the area of interest, make the proper suggestions and you make the offer.
All the best!