Quoting from S & A Digest:

House prices way down... "Tons of dollars" in real estate... MBIA in the clear (for now)... Janus is a bargain... Porter is a scream... Home sales: Not as bad as you think...

"Wherever you look, things look bleak," says Robert Shiller, co-creator of the S&P/Case-Shiller home-price indexes. Home prices fell 8.9% in the fourth quarter of 2007, compared with the fourth quarter of 2006. As covered in The Digest, Miami was the hardest-hit major city, w ith an 18% annual decline in 2007. Las Vegas, Phoenix, and San Diego house prices all fell 15%. Charlotte, Portland, and Seattle are the only three metro areas measured by the Case-Shiller index that still haven't experienced year-over-year price drops.

Sun May 11 2008, 10:56

What were your goals two years ago? Were they to find a home to move into or to wait two years until it became advantageous? My guess is you were ready to buy a home. Once you bought your home, your equity began to grow. True, the market has slowed a bit, but at least in Washington, very few areas have seen a true decline in home prices. Mostly, we see a decline in the growth rate from double-digit growth down to about 3% overall. The fact that you bought during a high-growth phase means if you'd waited for a short time period, say 6 months, you'd probably have paid even more for the same home. If you'd waited 2 years to buy, your property may have gone up in price by 3% and you might be able to negotiate the price down to what you paid 2 years ago. When you contract with an agent to buy a home, that's what they're going to do for you. Real Estate cycles last 7-10 years. Now we're in a Buyer's market. In some areas of the country, that means great bargains. But here, where prices are still going up, though slower than before, your choice is the same as it has always been - buy now and pay today's price, or wait and pay a still higher price. One way to break this cycle is to use the equity in your home to buy real estate. You can either generate cashflow, rehab, or lease-Option either property and live in the other. But you were right to listen to your agent 2 years ago. Real Estate is now, and will always be, the safest and most beneficial investment you can make. You just need some advice on your options, so you can make some Lemonade!

Sun May 11 2008, 09:46

Homeowners who purchased 2 years ago, when the market was at it's peak, are asking, "Why did we listen to the realtors who said real estate always go up, and if we don't BUY NOW we will soon be priced out forever!"

Tue May 6 2008, 17:00

Because homes are on sale, and money is cheap!

That's why it's called a "Buyer's Market."

Homeowners who purchased 2 years ago, when the market was at it's peak, are asking "Why did we purchase in a Seller's Market? I wish we had waited until now!"

Tue May 6 2008, 15:57

This is a very personal question. Why are you buying? Are you doing this for investment purposes or personal needs. "Someone' is always buying...consider how long you plan on retaining the home and what your motivations are. If you're planning on doing minimum down and only want to keep the home for 1-2 years, it may not make sense. If you're planning on retaining the home longer and it's the home you've been waiting for, then it may be worth your consideration.

Sun May 4 2008, 19:32

Now is the perfect time to purchase a home,rental or second home. The Seattle area is not experiencing the recession like the rest of the country. Our home prices are down because of the media. Interest rates are down and there are lots of mortgage programs available. BUY NOW! Call us today!

Tue Apr 29 2008, 12:52

Maybe a better question is why not? Interest rates are low, inventory is up, buyers have all the leverage in many markets, so ... Did you ever look at a stock market graph and cirle the point at the bottom where you wished you bought. At exactly that moment, everyone thought the stock was tanking. Wanted to wait out the trend and see if it recovers. The problem is that if you don't buy when everyone else says wait, you miss the bottom. No different here.

Tue Apr 29 2008, 12:28

Buyers have the ability to negotiate in some areas 5 - 10% have a seasoned Realtor give you stats and specifics to the area in which you are considering a purchase. Interest rates are great and the market is steady for those who qualify to purchase. Do your home work with a seasoned professional. A Certified Residental Specialist "CRS" or "GRI" would be a suggestion look for these designations when researching for advise.

Mon Apr 28 2008, 22:48

The wise thing to do now is to wait. More than likely you will see about 20-25% more reduction in prices in the next year or so. Obviously, it is hard for anyone to get home loans now. Also prices are at its peak. Even when prices start to go up, it won't shoot up quickly in days or months. Right now, most people who bought in the last few years got burned ( especially the "investors). Those people will be out of the market for a long time. It will be cheaper to rent. Calculate mortgage Vs rent you will be paying and see the difference.

Mon Apr 28 2008, 21:38

When this buyers window is gone it is gone. Where are you considering buying?

Mon Apr 28 2008, 07:25

1) It's the safest way to protect your future.
2) It's what the millionaires are doing to prosper in the future.
3) It makes sense to buy while real estate is on sale.
4) It's fun!

A side note in our local market, real estate is on sale. I can't speak for the rest of the nation.

Fri Apr 18 2008, 19:05

One of the first questions that I ask my buyers these days is how long do they plan on staying in their house. I had one buyer who said he couldn't be sure beyond 2 years and we ran the numbers and I did pretty extensive research into the area he wanted to buy in ...took into account how the current market was and concluded that it would likely be a losing investment if he bought...so he continues to rent.

From an investment perspective, now is a good time because prices are at a low point ... in the Seattle market, ...barring any more catastrophic market news...many areas are on the way up ...5 houses in my neigborhood that have been for sale for months all sold in March. If that hold true across our general market area, then yes...we may have hit bottom and now would be a good time to buy FOR A LONG TERM INVESTMENT. 2008 prices will probably remain flat with a slow return to a historical normal rate of appreciation in 2009 and into 2010. If you're going to buy and flip ...like i said earlier... you shouldn't buy.

So I guess the short and sweet answer to your question is... someone should buy in this market if they don't care what happens in the next 3-4 years and they're planning on staying in their home for a long time. If you're a home hopper every year or 2 ... or an investor that just wants to flip homes...now is ..for the most part...NOT a good time to buy.

Thu Apr 17 2008, 21:57

Why should someone buy? Why should someone buy in this market?
Separating your question into two parts might result in an answer more tailored to your specific needs.

I have been a real estate agent in Washington state for over 16 years. Long before I chose this particular career, I strongly believed in ownership vs. renting, and not just when it came to a place to live.

In the very old days, phone companies owned the phones their customers used. We were charged a fee (rental) to use them. As soon as that system changed and it became possible to purchase my own equipment, I did so. I did not want to pay someone else for the ongoing use of something I could own. That said, nothing remains the same. With today’s technology making yesterday’s purchase obsolete, I chose to rent my TIVO.

My point is, current circumstances definitely contribute to what works best for an individual at any given time.

Home ownership is very different from buying any other commodity. All of us need a place to live. By paying rent, a renter helps the landlord purchase his property. Why not build equity for yourself instead?

There are actually a few times when renting makes better sense. In a normal market (not the mega appreciation market many people have come to expect) buyers who sold in less than two years had to take money to the closing table because the cost of selling was higher than the amount of appreciation they had accumulated.

If you do not plan to remain in your new home for a few years, now is not the time to buy.

Creative loans have pretty much disappeared from today’s market, so that is probably a non-issue, but if you are strapped for cash for a down payment, work at saving some money. With home ownership comes home maintenance. If your credit is shaky, work at repairing it. Low credit scores mean high interest rates.

Now might not be the time to buy.

If, however, you do not fall into any of the preceding categories, now is a great time to buy. For the first time in a number of years, this is a buyers’ market. When will prices bottom out? I don’t know. But I do know the disappointment of a buyer who has invested emotion and excitement in writing an offer on what they perceived to be their new home, only to learn they had lost out to someone else in a bidding war with other buyers. And, for many buyers, this happened more than once. In the frenzy of the process, sellers, not buyers, benefited.
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Interest rates are low. Not all sellers have come to terms with the reality of today’s market, but the sellers who are truly motivated are making concessions they would not have done a year or two ago. And, motivated sellers definitely include builders. Standing inventory for them creates huge carrying costs. So, especially if you are interested in new construction, this is the time to buy!

Thu Apr 17 2008, 18:35

This is being done in another thread too.

http://www.trulia.com/voices/General_Area/Open_Opinion_Threa…

Thu Apr 17 2008, 18:11

Buying still makes sense for all the normal reasons, with just one exception. As a buyer you get to pick the home, neighborhood, and all the amenities you can afford. You can't do this as a tenant. You still get all the great tax breaks not available to tenants. You can still make all the improvements you wish to customize your home to your special tastes. Again, these things aren't available to tenants. The one reason that is open for discussion right now is whether buying is also a great investment. It will be in the future, for sure, but you may have to wait a couple years. In the meantime, though, you'll be a homeowner instead of a tenant, so you'll be enjoying many benefits. I believe we are near the bottom of the real estate cycle here in the Northwest. Homes aren't going to get much cheaper, particularly in the best neighborhoods. An added consideration is the great interest rates. Waiting for further price drops might push you into a less favorable mortgage market. Depending on your price range, as little as a 0.5% increase in your mortgage rate could raise the "actual cost" (monthly payments) of your new home and erase any benefits of a price reduction. And finally, there are legions of buyers who are sitting on the fence right now, waiting for a sign that the market has bottomed out. When that occurs you'll be finding yourself competing for the best homes which right now you might get for an offer.

Thu Apr 17 2008, 18:10

Seattle is a great place to buy real estate, even though it is expense. The market is still strong here compared to rest of the US. The inventory is larger than last year so it's a good time for the buyer.
Large corporations continue to ivest in the great NW creating lots of great jobs. The Seattle area has a good school system, both public and private. It 's a great outdoors area for all ages.
Seattle has lots of different packets of feel good neighborhoods. If you need information on any certain area just let me know. I moved here 18 years ago, so I know what it means to make a change.

Thu Apr 17 2008, 18:10

Mark, you’re classic. You point out my spelling error while relying on the use of such terminology as “doo doo” and “gonna” to make your point. I am sure you are pleased with your spelling ability. How’s your grammar? I found several grammatical errors in your writing which I would be happy to flag for you. Note to grammar, spelling and punctuation police, this is an informal arena and the content of discussion should be taken in such light.

Your assertion that economists could not see a bubble forming in the real estate bubble is devoid of merit. In fact, Greenspan spoke of “froth” in the real estate market as early as 2003 -- quintessential Greenspan speak. Mark, with your excellent rhetorical capacity I am sure you understand that forth is a material essentially comprised of small bubbles. Volker was speaking in the early part of this decade questioning financial markets and the Fed’s ostensible election to prop the real estate market with actions which were likely to lead to an inflationary period and the devaluation of the dollar. Bernanke inherited the problem.

It was the quack “economists” at the NAR , David Lereah and Lawrence Yun, who apparently never realized that the real estate market could slow down.

There is little question that historically it make sense to purchase a home at some time. But, references to previous gains have little applicability to the present discussion. The question is not whether it made sense to purchase in 1975, 1985 or 1995, the question is whether someone should purchase today. The alternative is not to always forego purchasing, but whether it makes sense to wait a few years and purchase when prices decrease as the housing bubble deflates.

In my opinion, an implication that housing can create wealth is misguided under current market conditions. Ask someone who purchased in 2006 or 2007 in most parts of California how much wealth they created with such purchases. The answer is obvious from the record level of foreclosures and defaults the state is experiencing. Those purchasers would have been better served by renting and ignoring the hype created by realtors who claimed real estate is always a great “investment” and prices would only continue to rise.

In my opinion, there are ample rental opportunities to wait out this deflating real estate bubble. This is especially true to the extent someone considers making a purchase today with an adjustable rate or other non-traditional loan with no money down. With that said, if someone has sufficient assets, they may not care about whether their home decreases in value over the next few years and there are benefits from home ownership. I don’t disagree that over the long term values will increase. But as Keynes once said, “in the long run we are all dead.”

NewportFiji

Thu Apr 17 2008, 18:04