Foreclosure in Villanova>Question Details

Pat, Home Buyer in Pennsylvania

Does it make sense to by a $1,099,000 house now or wait? Because of the markert?

Asked by Pat, Pennsylvania Sat Aug 11, 2007

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18
George Antonopoulos’ answer
Hi Pat

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.
3 votes Thank Flag Link Sat Aug 11, 2007
If the local market is currently tilted in the buyer's direction (high inventory, low absorbtion), and you are personally and financially ready to buy, I don't see a reason to wait. Excellent credit and a sizable downpayment will counteract the jitters in the lending industry. Talk to a loan officer prior to making any decisions, especially with the recent hike in Jumbo loan rates. Given your price point, you are a likely candidate for financing more than the $417k conforming loan max. If this applies to you, you'll want to review several possible strategies (such as taking out a smaller second loan in addition to a first that falls within the conforming arameters).

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.
2 votes Thank Flag Link Sat Aug 11, 2007
Don't buy it now...wait utill the sellers list the property with me as their agent, then buy it. ;-)

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)
1 vote Thank Flag Link Wed Oct 3, 2007
All real estate is local and, well, the Main Line is the Main Line. Buying a home here offers so many conveniences, character, outstanding schools and universities, and great places for the arts, it is, will be, and always has been a great investment (if the numbers work and your needs are satisified). Chances are you won't get that same house for $800k next summer and, more importantly, financing may be a little tricky next year. It's not a matter of when, just which one. Have fun with the process!
1 vote Thank Flag Link Sat Aug 11, 2007
The title of the article is "Can't Sell Your Home?..." Here is the link:
http://www.nytimes.com/2007/07/11/business/11leonhardt.html?…

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.
Good luck,
Ruth
Web Reference: http://www.oak-park-il.com
1 vote Thank Flag Link Sat Aug 11, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
Pat,
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 staceykarp@century21.com
0 votes Thank Flag Link Tue Jan 20, 2009
If you have fallen in love with the house, and you are buying to live in it, you should buy it . Make an offer based on recent sales and offer less than that to see how low they will go and then negotiate from there. But start the negotiation if you really love the house. I had two buyers this year who lost out by waiting.
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.
Web Reference: http://www.gitabantwal.com
0 votes Thank Flag Link Thu Oct 2, 2008
you should be able to get it for 11.4% cheaper today

anyways

good luck
0 votes Thank Flag Link Tue Mar 25, 2008
Pat, when it comes to Main Line real estate north of the $1 million dollar range, I think it is always a good time to buy or sell. Those high prices are what we call dicretionary homes...no one HAS to buy that expensive of a home, so while they will swing up and down in prices, they will always be worth more because of their value.
0 votes Thank Flag Link Tue Mar 25, 2008
I know of a brand new empty house in Gladwyne that was 2.2 million a year ago - the place was just reduced to 1.6. I'd buy that one - from me for maybe 1.45. May as well go for something that can really appreciate when the smoke clears. The owners may hold some paper... :-)
0 votes Thank Flag Link Wed Oct 31, 2007
There is no right or wrong answer! What do you want to do?

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.

Best wishes!
0 votes Thank Flag Link Sat Sep 15, 2007
In a vaccuum, it is a difficult question to answer. Most markets are now tilted to the buyer. The seller/buyer who seeks to downsize is at a disadvantage, while the one who seeks to upsize enjoys a large advantage.

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.
0 votes Thank Flag Link Sat Aug 11, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
Wiat for what? In my opinion, it's all relative. If you wait, what are the chances that interest rates will go up and then any potential savings in price will be refelected in increased interest rates? It would be helpful to hear more details. Are you selling a home before you buy? Are you moing up or downsizing? It this a primary residence?
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Sat Aug 11, 2007
Cindi Hagley,…, Real Estate Pro in San Ramon, CA
MVP'08
Contact
I would say alot of it depends on your reason for buying! What are your needs and your motivation for buying. That would play a huge part in your decision. I do agree with some of the other posters that the value of the higher end homes tend to stay stable. I would look into any tax liabilities. If you have the time, research what is going on with the home, how long it has been on the market, what it sold for prevoiusly and what listed properties in the area are doing? It may be a good time to do some negotiating.
Web Reference: http://carriecrowell.com
0 votes Thank Flag Link Sat Aug 11, 2007
Hello Pat

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!
0 votes Thank Flag Link Sat Aug 11, 2007
Are you looking to move up, move out of the area or test the market? If you need to make a change then now is the time to do it. Since we do not have a crystal ball and cannot predict the future you should evaluate your needs and make your decision based on that. The properties over a million have not been so effected with the market place as some of those buyers have the funds available to purchase. Since your property is over a million you may be ok depending on the low and high end of your market place. Wishing you the best.
Web Reference: http://pamwinterbauer.com
0 votes Thank Flag Link Sat Aug 11, 2007
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
Contact
Interest rates are very low now, regardless of what the media claims that the market is slow. It is a buyer market, you may have a stronger position to negotiate on price.
0 votes Thank Flag Link Sat Aug 11, 2007
A NY Times article said that over $1 mil are doing better than the rest of the market. Go for it.
I'll find the link for you.
Ruth
Web Reference: http://www.Oak-Park-IL.com
0 votes Thank Flag Link Sat Aug 11, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
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