I would suggest closing as soon as possible on your home if the buyer is depending on USDA financing.
Historically, funding for USDA loans has run out before Congress refunds in the fall. With the current volume USDA is experiencing, underwriting/funding has been slower than usual in our area (Pitt County). Several of my team's USDA closings have been significantly delayed over the past few months because of that. Add to that the potential of funding running out earlier than usual makes it all the more important to get the house you're selling closed sooner rather than later...if the buyer has to get a USDA loan because his closing funds are limited.
Remember, your buyer's first payment will be delayed approximately a month, so theoretically he could close end of April and have a June 1st payment. Another possibility is close early and rent back a month or two, provided USDA doesn't have a problem with that.
Best of luck...hopefully, my perspective has been helpful.
You're painting with a very broad brush. Your historical data may be applicable to your area and the national average as a whole, but it's not applicable to all areas. It's obvious some markets appreciated way too rapidly over the past few years. Others like my market, appreciated 2%-3% per year on average for the past several years. The "bubble" areas have suffered a much steeper decline in value relative to the more stable areas.
With that being said, in your area prices may continue to drop and waiting and hoping to hit the very bottom to buy may or may not work in your favor. In our area, prices seem to be stabilizing, days on the market are decllining and waiting will probably cost a buyer more. Add to that the currently extremely low interest rates, and the net cost differential could possibly be much more by waiting. In a nutshell, it all depends on if you like to gamble or not. Time will tell whether the decision to wait till later or buy now was a wise one.
Best of luck to you, whatever you decide to do.
Lets see what prices did on a historic basis. Until 1998 (or so) prices had some times they went a bit high, then they dropped again. Overall they stayed the same accounting for inflation. If prices are above 1998 levels (plus 30% for inflation) they are to high. Price stabilization means that houses are back within the normal income to house price ratio once again. That should be 2.5 to 3 times average income for the average house. We are not there yet. As you said, why buy now knowing that prices will drop... I wait.
Once the government realizes that they can't continue to "fund" the American dream continuously, which they already have, it's just a matter of time for stabilization of the markets, and a continuation of getting back to seeing some appreciation in the real estate sector. When Fannie Mae and Freddie Mac stop buying 80% of all mortgages generated across the country, which they've already said they will do in the next 30 days, mortgage rates will start to bump up just a bit. Once people realize that the prices we have right now will not continue to be this low, you will see people getting off the fence and getting back into home ownership. It's not a matter of if it will happen, it's when. And all signs point to the very near future. It's just another cycle. This isn't the first time the markets have done this. It's just the first time that a lot of people have seen it.
NChome, it sounds like in June USDA would be out of money. Come September, they may not be. When congress comes back in the fall it is to be expected that they would put more funds into USDA so loans can be made. Maybe that will be november, it should see more money available. I think congress has just spent so much money they can not spend more on something that might make sense like house loans.
I have a buyer for my home, but we were looking to not close until June when their lease is up and I will be building a home in a RD area and it won't be ready until September.
Keeping People Employed = More Disposable Income and Income for Housing = More Demand For Housing = More Home Sales = Lower Inventory = Property Values Stabilizing = Less Equity Lost in the Biggest Investment You'll Ever Make = True Long Term Wealth Return = Happier Families Everywhere
What you've got to understand is, as stringent as qualifications and guidelines to get a loan are now anyway, if the buyers aren't qualified, They're not going to get a loan. Period. Even with USDA. So it's not like we have borderline people using USDA and getting into situations they shouldn't be in. Credit score requirements are now higher, they need more money in the bank, limitations on gift funds. All of these things have already been changed for awhile.
Agreed. But USDA is primarily for low income buyers in rural areas. This economy has been very tough on everyone, especially those in low income brackets. The ones I see are paying $800 plus to rent and cannot save the down payment. Getting them into a home, even at 100% saves them money and puts them in potentially a much safer situation for their family. I'm ok with that.
If those needing a zero down are removed from the marketplace those who have down payments will have less competition. That could give buyers a big help... qualified buyers that is.