Home Buying in La Puente>Question Details

Veronica Cas…, Home Buyer in El Monte, CA

Forecast for housing prices in La Puente, CA?

Asked by Veronica Castillo, El Monte, CA Wed Jun 25, 2008

Should we buy now or wait until fall '08?

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Answers

6
Veronica,

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!

Lillian Pastora
Broker-Associate
RE/MAX Masters
626.375.2507
Lpastora@remax.net
0 votes Thank Flag Link Tue Jul 1, 2008
Don't waste your time asking Realtors about price trends, investing in real estate or if it is a good time to buy. It was Realtors who were spouting off two years ago that "it was a great time to buy" and "prices never go down." We all know how foolish that advice was. According to Realtors, every day during the past 100 years was a great time to buy OR sell real estate -- and remarkably the same will hold true for the next 100 years.

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 “the world is flat” 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

1989: $214,831
2000: $215,900

In the early 1990s, there were price drops in ALL communtities, high end, low end, beach, inland, condos
Pretty amazing, someone who purchased the “median home” 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,
NewportFiji
0 votes Thank Flag Link Thu Jun 26, 2008
I say get ready to get ready because some good oppurtnities are currently available and more to come so you need to be in position to take advantage of them by having your loan ready and your desired area pin pointed. This way you can take your time and wait for the right oppurtunity to arise.

If this is somehting you are ready to pursue then let me know and good luck to you.
0 votes Thank Flag Link Thu Jun 26, 2008
Hello Veronica. Buying is a huge step and it takes a long time to decide, but if you continue to sit on the fence, you will stay on the fence. With all of the foreclosures and bank-owned propeties out there, you are sure to find a great deal! You should take some time and find an agent that can help you. First thing is you need to figure out if you qualify, then you will know what you qualify for. Knowing that you can decide if you want to buy now...maybe you will find the dream home you have wanted at a great price and even better payment than you thought. I just sold a house in El Monte for $260,000, I know the area. If you need someone to help you please send me an e-mail at dyannaavila@hotmail.com. I have met many people on Trulia and have helped them purchase a home. I am an expert when it comes to short sales and bank owned properties, try me out!

Good Luck!
Dyanna
0 votes Thank Flag Link Thu Jun 26, 2008
Hi there Veronica. No body really knows, Nobody has a crystal ball. It will either drop , increase or stay the same. Buy this does not matter a whole lot as much as interest rates, a 1/4% interest rate will make a difference
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
Kind Regards
Michael Barron
Realtor/MBA
First Team Real Estate
(714) 552-6817
michael-barron@sbcglobal.net
0 votes Thank Flag Link Wed Jun 25, 2008
Hi Veronica,
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
Web Reference: http://ocnorth.com
0 votes Thank Flag Link Wed Jun 25, 2008
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