Hi Puffy,
With the combination of low interest rates and low prices, it is certainly a buyers market. Sellers are willing to negotiate more with buyers whether in paying closing costs or accepting lower offers. You will not know that prices have gone up until it is too late! Have you ever heard family or friend say," I wish I would have bought a home last year before the prices went up!" Yes, property values have gone down even in the Annapolis/Balto/DC corridor however not as badly as some areas. I also have found by over 25 years of real estate experience that this market is cyclical and it will change back to a sellers market . No, I do not have a crystal ball to know if it is this year or in the next few years.To make certain, that you do not end up upside down, do not take equity out of your home!Also, select a realtor that knows the area. Location is important when purchasing a home.Select a buyers agent that will also do a market analysis of the property so you can see if the property you want to purchase is a good value, The buyers agent can also help negotiate on your behalf the best price! As long as you hold onto your home longer than a few years then you should be okay. When I first went into the real estate business in the 70's, I was told that one would have to hold onto their home at least 5 years to make a profit. iI you are renting, you will have tax advantages with home ownership! Also, if you are a first time buyer or have not owned a home in 3 years it would be in your best interest to buy now and take advantage of the low prices,low rates and the $8,000 tax credit.There still might be time for you to settle by 11/30. which is the deadline with the tax credit unless it is extended.Hope this information helps you!
Donna Wisniewski http://www.trulia.com/profile/donnawisniewski

Hi Puffy...
As your other answers have made clear, who knows. Yes, there are probably some foreclosures on the horizon, and that may increase supply (it does NOT affect demand, btw), and any Econ 101 student knows a shift of the demand curve should lower prices. We also know that an increase in the money supply, which is what the bailouts technically are, usually creates inflation, which will definitely put upward pressure on rates, but also upward pressure on home prices.
Here are my thoughts. You need a roof over your head, home prices and interest rates are very low, and you have an additional 8,000 dollar incentive.
Bottom line? If you can get in a home you like for about a rental payment or less, and your timeline is say 5-10 years, you will be fine. Remember, rent pays someone elses mortgage. Why not have something for yourself as you pay that monthly amount?
Hope you found these comments helpful, Jim.

Puff-

If any of us had a crystal ball we wouldn't be here on trulia answering questions... The only real information you can rely on is what you know: 1) The Washington/Baltimore Metropolitan Area is historically one of the more stable markets in the country. 2) Interest Rates are currently at all-time lows. 3) Prices have fallen substantially since their highs a couple of years ago. 4) Over time, real estate values tend to increase.

The bottom line is if you are in a position to buy there are many advantages to home ownership and many great deals out there.

If you have any questions or if I can be of any assistance please do not hesitate contacting me.

Sincerely,

Dennis Skelly
Ricker Realty
202.438.2091
dennis.skelly@verizon.net

Hi Puffy,
Funny, unfortunately you'll have some confilicting information here as well. As previously stated, we can't predict the future, however, we can anticipate what will happen based on data that is available.

What we know:
Banks have substantial foreclosures that have not yet been introduced to the market. Once that happens, there will be higher supply, lower demand. This will cause housing prices to depreciate.
We know that some of the loans that were offered years ago are getting ready to adjust (recast) which are going to cause additional homeowners to become distressed and will likely end in foreclosure.
We know interest rates will rise when the market begins to stabilize which will cause a buyer to afford less of a home then when intererst rates are low.
What we don't know - will the $8,000 tax credit be eliminated in November or be extended? Will it be available only to military servicemen and women?
What we also know is that real estate is cheaper today than it has been in 3 years.

Like my friend Mansur stated, there are other considerations to buying your home than just the financial aspect, although this is a big one and perhaps the biggest one.

What I would suggest is to pull out paper and pen and write out a list of pros and cons to buying today. What is the cost of waiting? Why do you want to buy a home and what will you endure if you stay put? Put a value on these things - try to put a numerical value on them.

Consider :
Real Estate is definately on sale
Interest rates are definately at near historic lows
Renting is throwing money away
Owing a home will afford you tax benefits
$8,000 tax credit is here today (if you are a 1st time home buyer)

Short term I predict and this is only my prediction - we will see short term price decreases. If you are in your home for 5+ years, if history repeats itself, you should see the market improve. If you are looking to buy today and sell quickly, I would caution that the market is too volatile.

Hope this helps rather than intensify the confusion Puffy!

Diane

Home buying should be about lifestyle a lot more than a pure financial gain calculation. Each year of your life that passes will not come back. In order to manage risks about not being upside down, you buy at bargains -- which is something you can only do in a buyer's market such as we have now and by having an experienced agent working for you. No one can accurately predict the future -- simply because of too many unknown factors.

oh gosh, sorry aboout the typos!

Puffy,

In my opinion, buy now. Even if prices were to go down a bit more (which in my opinion, I don't think they will),
the interest rates are more than likely to increase. Anything you would have saved if prices we to have gone down, you are still paying for because you waited and interest rates have increased. Plus, if the tax credit is extended, you would benifit from that, as well as, benifit from the tax write off for owning a home. Why wait?

Call me and we can talk about the pros and cons!
Kathy Dawson, GRI,CSSA,CDRS
Champion Realty, Inc
410-507-8970