I'm a Realtor, but I agree with Newport Fiji that the Realtor's opinion on when to buy doesn't really matter. And in fact, the more opinions you listen to, the more confused you are bound to get (as evidenced by this board :)
I do have a degree in real estate and finance. I was trained by a Harvard MBA. I read the Wall Street Journal. It doesn't matter. What matters is YOU and YOUR goals.
DEFINE YOURS AND YOUR FAMILY'S GOALS.
Is your goal to live in this home for the next 3 years or for the next 10 years?
Do you plan on growing your family more?
Why is now personally a good time for you to buy?
What would you be gaining personally as a family by purchasing now or waiting until the end of the year?
Once you have clearly defined goals for your family, you will be in a better position to make the decision of whether to buy now or wait. if your goal is to live in the home for many years, in my modest opinion, buying now (Summer) or waiting until the fall of this year, will not really make much difference in the grand scheme.
Hope this helps and good luck!
Realtors may be knowledgeable on current and past prices for their area, but they are NOT experts on future price trends. Realtors are NOT economists and very few have any business or economic training to speak of. They are SALESPEOPLE. The reality is that they only get a commission if you buy, so they have an incentive to be less then accurate as to their assessments. The few competent Realtors with integrity would admit that prices are going down and most buyers could save money by simply waiting for the bubble to further deflate.
Assertions that you must buy now because of low interest rates is simplistic and misleading. Interest rates do play a role, and rates are historically low right now. However, one can refinance a loan in the future but they are stuck with the purchase price. Further, if interest rates rise, this will put further downward pressure on home prices, as you would not be the only one utilizing financing.
Apart from a few â€œthe world is flatâ€ realtors, everyone realizes that prices are falling. Those that are expecting a quick turn around from this bubble are dreaming. The last cycle took about 11 years to reach peaking pricing from the previous peak. Here are your Los Angeles County vanilla medians between 1989 and 2000: http://www.laalmanac.com/economy/ec37.htm
In the early 1990s, there were price drops in ALL communtities, high end, low end, beach, inland, condos
Pretty amazing, someone who purchased the â€œmedian homeâ€ for 214,831 sold for 215,900 11 years later. However, this bubble appears even larger that the 1989 run up, as depicted in the following graph: http://latimesblogs.latimes.com/laland/2008/04/where-we-stand.html . Granted prices are falling faster, so perhaps we can reach a bottom faster.
In my opinion this would generally be a terrible time to purchase. All leading indicators are pointing in the same direction as to the southern California market, (i) inventory has increased, (ii) sales transaction volume has slowed dramatically, (iii) lending standards have tightened (pulling thousands of potential buyers from the market), (iv) notices of defaults and foreclosures are at records levels, (v) the economy is slowing (looking more and more like a recession), (vi) literally thousands of high paying mortgage and other real estate related jobs have been lost in southern California over the past year and (vii) the mania which surrounded the real estate market a few years ago has been replaced by a conservative caution steering people to other investment classes. All of these things will put downward pressure on pricing for some time to come.
The reality is that residential prices will almost certainly be lower later this year, likely lower in 2009 and possibly even lower in 2010. Real estate cycles take many years to play out and we are at the early stages of a down cycle.
With that said, if you find your dream home and can purchase with a large down payment and conventional financing and don't care about prices dropping further, consider the purchase. But DON"T purchase with the expectation of future price gains for a long time. If history is any guide, prices will not rebound quickly when the bottom is finally reached.
Best of Luck,
If this is somehting you are ready to pursue then let me know and good luck to you.
The facts now indicate the affordability has risen 18 points to 44% which is good news for first time homebuyers. This is the probably the best time to buy for buyers in about 20 years. with the curret levels of inventory, low interest rates, number of bank owned properties. Compare this to 2-3 years ago when homes sold in days regardless of the condition. Just proves its a cycle
Hope this helps a little
If you need any more information please let me know
First Team Real Estate
In my opinion, when deciding rather to buy now or later, the bigger question is what is going to happen to interest rates. Rising rates will have a bigger impact on your monthly payments than housing prices falling a little more. All indications are that rates will be going UP over the rest of the year. I hope that helps. Walter