You say there is going to be another 20% decline on average (I would love to know what crystal ball you are using), I for one do not know whether we are close to the bottom, at bottom or far from the bottom, and I do not believe anyone else knows. Oh there will be someone correct this time in their prediction, but they may have been wrong twenty times. Just watch the money shows and one says this stock is the best to buy, the next hates it. Same with the housing market.
I do think your 20% figure could be correct in a way, and that is that 80% to 90% of the homes in this market are overpriced. Those would have to be reduced with many requiring a 20% reduction or more to sell. However, there are many homes that are selling in this market, and I doubt there will be any need to reduce the price another 20%. I always search for the best buys for my clients and just last week we had 12 homes to go see. When my clients arrived in town, there were only four that were not under contract. Well priced homes sell in any market.
Quite simply every market has its true market value, and homes at that days market value will sell, and actually sell quickly.
Again, you could be correct, or not. We will have to wait up to three years to find out. Personally, I doubt the homes that are truly priced to market today, will not see any great price reductions, but those that are overpriced which is the majority, will have to come down, or they may have to wait a long time for the prices to get back to the prices they are asking for.
The other thing nobody mentions is mortgage rates. That is another thing where there are lots of predictions on where the rates will be in the future. If the majority is correct and inflation is our big fear, and with rates now historically very low, a 10% price reduction savings can be wiped out if mortgage rates rise just 1% which is not unheard of.
Remember for the last three recessions we have had, economists and the media have predicted they would occur fourteen times, so they were only correct 21% of the time.
So going back to Daniel's original question of should he buy with a guarantee of only being here for three years, it is a tough question to answer.If he had 5 - 10 years the answer would be easier. If he were asking for an area such as Detroit the answer would also be easier. But in an area such as Tampa, where the influx of people is expected to grow at a slower pace, but still growing, the answer is not as easy. Especially with most recovery's taking a V shape where when they finally hit bottom, they spike back up. Will this happen this time? Only time will tell. Does anybody know when we have hit the low? I do not believe so.
Most make great profits in real estate, and the number of years where people lose money is relatively small, however as in all investments if you bought at the high point then it really hurts those people as we see today.
However, I would also buy a cheaper house not a high end house. So if the market doesn't rebound in the next three years, you can't get hurt too bad. if you end up staying after 3 years you can always sell that house & trade up to a higher price range or a different neighborhood.
I would consider all financial factors including tax benefits. It sounds like you are doing so (e.g. asking Seller to pay closing costs). I say go for it but not extravagantly. I do think it is good that you are getting multiple perspectives. In the end, it comes down to your risk tolerance and other factors e.g. I personally don't like renting long term. Best of luck to you.
I would rent for the first year and see how things go with your job situation. If you were to stay longer than 3 years my advice would be to purchase a home.
It will probably take a couple of years before we see home sales increase again. If you rent for the first year, you can get a better feel for how the market is doing.
My last post may have come off as being harsh, however lately on Trulia there have been many people asking questions, we then answer, then the original person asking the question will give their own answer and then tell everyone they are wrong. Some have actually been nasty. Yours was very respectful, but did not seem to account for what many people had posted.
There are many real estate agents that always say buy. However, there are many of us that post here, spending much time to honestly with our opinion answer questions. Although Realtors often get bad press, the majority of Realtors truly want to help their clients meet their needs. If I tell people to buy when they should rent, or sell when they should stay put, these people will be very disatisfied with the service I give, and one disatisfied client can really hurt your business.
I have often told people after a full consultation I would recommend they do not sell or buy at this time. And for some the answer is different, and it really depends on their needs. Being honest with people, rather than worry about selling a home to someone who will not benefit is why 82% of my business is through referrals, and I often get referrals through people I have only consulted with and have never done business with.
I for one and I am sure many others in all the countless hours we spend posting answers here, have never received any business from answering the questions and certainly have received no money, but continue to answer as I do enjoy answering the questions.
Again I appreciate your post, and I'm sorry if my post was too harsh.
Good luck in whatever you decide to do.
And Daniel, you say we are biased because we sell homes, however I can make my living if you buy a home or rent a home, so it really does not matter which you do, and when I work with a client, I try to be honest with them, after all if I tell someone it may be a better idea to rent now, they will likely use me when they are ready to purchase in the future.
In Westport, CT in 1998 the media and economists were telling us it was a terrible time to buy. Within six months of buying the market had turned around and the values increased incredibly until 2006. We bought because the time was right for us. Only you can decide if the time is right for you or not. I have stopped trying to predict the market and find often that when the media is reporting values will just grow and grow as they did in 2005 it is time to worry, and when they are reporting all doom and gloom as they are now, I start to think the bottom may be close. As I said in my posting below, when we buy we always take a chance of getting nice gains, but at the same time take the risk of losses.
In thirty-years of buying and selling properties, I have found that when people try to predict the market they do not do well. They don't want to buy when the market is getting too high, fearing it will crash and either end up missing all of the gains or finally decide to buy just as the frenzy is wild and then the market declines. Others wait for the market lows and miss those and buy too high or not at all.
I have always bought when the time is right for me. Has the timing been wrong? Once and it hurt when I sold and lost money, but by not trying to time the market I have made a lot of money through real estate. In 1998 we bought just before the market recovered. If I listened to the media and economists we would not have bought at that time, and would have missed all or most of the gains we got.
Only you can decide what is right for you, and are you willing to take the chance of nice gains with the possibility of losses.
Good luck in whatever you decide.
If you are interested and would like to stay month by month until you find what you like, please e-mail me at email@example.com
at least trulia works on your new vista machine
and you shouldn't have dropped out of Harvard
we'll forgive bill for it
nobody knows about the future
you are correct
but we can talk about here and now
you don't need a crystal ball
lets say, FL housing prices increased over 100%
avg joe's salary didn't
now its time for the correction
20% is a very conservative estimate
i think for FL the decreases will be much more
realtors shouldn't be too concerned
when things adjust there will buyers/sellers again
you'll just have to drop the
"houses never go down in value" thing
at least i didn't get the thumbs down on my last post
LOL! Love your answers - even tho most are incorrect. Bill Gates got his start by dropping out of College, and getting a buddy to help him invent Windows OS in his parents garage. That is risky, for sure - and to go up against APPLE?? EVEN riskier.
Warren Buffet didn't pick the cheap and safe, he picked the sure bets, lived beneath his means and didn't give his money away.
and btw - If you look at my original answer, I did not ask Daniel to call me either, although many others DID and I consider that as a form of spam on this forum, so not sure where that came from.
As for my windows software, I got a new pc and it came with VISTA. Right now I'd love to choke BG, but am going to work thru this and buy a MAC the next time. Even the tech support people don't know how to help you when you have a problem, and if I upgraded the 15 programs that don't work with VISTA, it would cost me a mere $3500. That does not include my all-in-One printer, copier, fax and scanner which is not VISTA compliant, so don't get me on a roll with that issue ;-)
This was a fun diatribe though, thanks for your answers from the other side of the fence, even if you didn't answer all of my questions ;-) it was nice of you to respond, since most don't, and we always wonder if we helped, made a difference or did someone just die, lol!
"I'll bet Warren Buffet or Bill Gates didn't get where they are today by playing it safe, or cheap. "
I'm not a gambling woman but i bet you are wrong
Warren Buffets middle name should be cheap or safe
he lives in an "avg joe" house in Omaha, NE (for about the past 30 years)
he drives an "avg joe" car (i think its a chrysler)
he got where he is by being safe and cheap
he bought safe and cheap stocks
if you bought the berkshire hathaway stock 20 years ago for about $1000
its worth about $110,000 today
do you want your windows software to be risky and expensive?
remember the 2000 tech bubble?
if you bought YAHOO stock for $250 per share
that would be risky and expensive
by 2001 YAHOO stock was $25 per share
that would be safe and cheap
and Warren bought a bunch.
housing bubble is the same way
my advice is simple
if you are buying
wait, rent for now
don't join the 8.3 million people in the "underwater" adventure this year
yes, buy when the prices have corrected (probably another 20% avg decline)
if you are selling
its not a good time to sell the house
if that gets me thumbs down
i'm ok with that
are you selling your house?
are you buying a house?
put yourself in Dan's shoes for a second
I've given him a good answer
and I didn't tell him to call me
I'll bet Warren Buffet or Bill Gates didn't get where they are today by playing it safe, or cheap.
Sometimes it is better to take a chance. It all depends on how conservative you are... but in most cases the very wealthy or (at least ) financially sound people never played it cheap, OR safe.
Profound words of wisdom from the "unsafe and not cheap realm ;-) "
You can have safe and conservative, or you can be a mover and a shaker, but you can't have both. Maybe Trulia should insist on more info, then we could all give better advice but until then, miles to go before anyone sleeps.
Lets say you rent for $2K/month and live there one year, that is $2400 bucks.
Now lets say you BUY for $2K/mo, get the tax write off with mtg interest, homestead and SOH and you sell, even at a tad bit of a loss a year or so later...
Has anyone ever really crunced these numbers to see if they'd be better off renting vs buying? The upside is, the market may improve (hey nobody really knows, right?) and with interest rates so low, and foreclosures and short sales rampant, it may make better financial sense to buy, hold for 3 yrs, then sell...
Then again, it depends on your tax situation, which nobody ever shares.
Anyway, just a thought from the other side of the fence. I've been telling more people lately to hang in there and not move than to move forward, but as I said, it depends on each persons unique situation. One size does not fit all.
;-) Paula Bean
point well taken
but the truth is
renting is safer and cheaper
the FL market is in free fall
nobody knows where the bottom is
you can always get out of a lease with minimal financial damage
you can't always get out of a house
i read somewhere the banks do not want
to loan money for any condos in FL
there was too much speculation
and Dan says he's not sure about staying long term
it seems the realtors take this as a personal attack
its just the way the market is right now
So what did you end up doing? Inquiring minds want to know ;-)
To Hi just looking from VA:
yeah, 2 more thumbs down because you are giving biased advice. Sometimes it's best to rent, sometimes to buy, but you just gave an 'off the cuff' answer without knowing more details. Without regard to most of the agents advice who said 'rent first' I also have to mention another post made by Daniel, who defended himself as a Physcian who "could think".
Does that mean that real estate agents don't think, or don't care?
Have you ever seen a patient with no insurance and no money and still didn't care, Did an exam and ordered tests anyway? I'll bet not. Additionally, I'll bet anyone else who has a job would not go in to work when there is no guarantee of being paid, yet REALTORS do it EVERY DAY.
People may think agents are a bunch of 'uncaring people who just want to sell you something' but in my 30 yrs of experience I have to say that - yes, we all have our bad apples, but for the most part, I think we all really DO care, and we get our business from satisfied people, AND we do a lot of FREE work. So what's up with the bad reputation? Would YOU work for FREE like we do 80% of the time? My guess in NO. Still, we all try to help, just like giving advice on this forum makes us no money, it is all about trying to help.
NOW that we all understand where each other is coming from, WHY don't we try to act professional, give and get good advice, and play nice? Otherwise, there is a lot of other things we can all do with our time.
This is a great time to buy but you do have to take into consideration that in three years you would not have paid much on the principle or gained much value in your home unless you got a very good deal. You may want to look at a Lease with an option to buy in 12 or 24 month. The option to buy will hold the purchase price at the current market price (todays price). If the market takes an up turn and the property appreciates 10% to 15% during the lease term you know you have a great deal but if the market continues to move in a downward trend you have the option to walk away. The seller may even grant you a percentage of the monthly lease towards your downpayment but keeps that if you don't take the option to buy. There are many lease with options to buy home in the Tampa Bay area right now. I wish you great success in your move to Tampa and hope you enjoy your stay. Let me know if there is anything I can do to help you.
Realtors thinks too......tangle with laws, offers, market trends, needs and desperate cases.
Realtors, do math, financials, laws and sometimes miracles to get their clients dream.
Realtors as a Doctor are "mostly" higly specialized and don't ask a butcher if the roof will rotten.......
No armas or offense, just a placid conversation as Trulia is meant to be, Foreclosure are everywhere and with an incredible new construction high inventory, a competitive market has been created, job laid-off is probably the biggest cause, rather than Tampa or Florida depreciating........
I'm personally confident that with the elections, low interest rate and the 1st (tax) amendement, 2009 superbowl and all Tampa has to offer, we'll be on the raise by June.
Mostly people is scared off by the economy, in fact 90% of the buying is made by Investors who bargain thanks to CA$H deals.
It's not a Realtor duty to "sell" sell, sell....... rather study the feasibility, according to the client needs and possibilities, properties are already on the raise... check it out, and some areas in Tampa still appreciate 3-5% a year...... only a mule would leave a Doctor throwing money down the drain by renting, I guess, an upscale house, did you verify rental rates?
Did you calculate taxes benefits? Depreciation........ and the benefits, saying: it's my House!
Once again I feel we're getting back on track, you'll watch and I'll be glad to share a glass of wine and see who did the right prediction.
You can tell when a market hits the bottom in 2 cases, either it's too late because prices are "ALREADY" rising or you have the christal ball.
In all the other cases a wise and knowledgeable person will analyze the trends, hystoric data, curbs and like Doctors preventing before cure it.
Remember everything has a cycle, NOTHING GETS CREATED, EVERYTHING IS TRANSFORMED!
I'll look forward to continue this conversation few months from now, if you so like, and bet you a bottle of wine :)
best regards, Antonio
Congratulations on your move to Tampa! I hope your move works out to be a profitable one. Job relocation moves can be tough since you are at the mercy of current market conditions in both areas. You may find you love Tampa so much, you might decide to pass on your next relocation offer.
Iâ€™m sending you a link to a rent vs. buy calculator at SmartMoney.com that you may find helpful in making you decision.
If you decide you would like to buy, need help finding a rental, or have any questions about the area, feel free to give me a call at 813-230-5804. I have lived in zip code 33624 for the last 20 years (Iâ€™m also a northeast transplant!). Best of luck to you!
PS You can search the Realtor MLS for rentals and properties on my site, and you don't have to sign a guest book or anything.
it really seems that people thinks of Realtors like cars salesman!!!
We analyze and work hard for our customers, as I expect Daniel to live on referralls, but for some reason people don't really appreciate the effort and diligence this Job require!
A last note....... Daniel, you can buy properties "bank owned" 70 cents on the dollar or less..... as you said you might be too busy with your profession and not be as much of a Business man, therefore let the PRO'S do it for you, eventually with a face to face evaluation.
best of luck.
a move from another state it's no joke, but if you also add throwing money down the drain for rent, it's even crazier :)
Tampa it's not exactly what used to be and we experiencing substancial growth every single year no matter what!
Jobs are still available and you're coming for that...........the airport will be International soon, a shuttle will serve downtown empowering the strong presence Tampa already has a business city; Superbowl 2009 it's here, need to add more?
Altough a declining market hitted us, houses in the right "areas" are still appreciating 3 to 5.8% a year; predictions are for magicians, but I can defentely tell you my opinion..... whatch what will happen in june!!!
We're are almost at bottom, and now it's the time to buy, matter of fact I'm swamped with investors buying NOW!
A rent vs buy calculator will tell you that it's a good option buying, if you keep it about 5 yrs....... well now compare an average $1000 in rent x 36= 360000 if you buy right, you really think a house will depreciate 36k when everybody in the world can tell you that in 3 yrs, even FORBES, we'll be in good shape?!!?
be confident and don't waste your money, you'll soon find out how sweet is having a "saving" in equity down the road, if you choose the right Realtor in this HIGH inventory, foreclosed and R.E.O market.
Save yourself the DILEMMA and give me a call: 813-785-7529.
I'll paste Rent vs Buy calculator here and a 'reference' link to search foreclosed properties, you can refine it by zip or whatever your requirements are: http://hothomespot.com/rent_buy.php
I Aree with Phil, rent for a year and see where life takes you. By then you will know where you want to buy if you don' t get relo'd. If you DO get relo'd, you wont have to worry about selling a house in a buyers market.
I know some great propertry nabgers I can refer you to, if interestedd send me an email.
Best wishesm ''