And a lot of it depends on the area.
In our area prices dropped 50% to 60% from the 2005-6 highs but look to have bottomed a year or so ago. I am not seeing the deals that we were seeing a year ago.
I have been working with investors who are buying houses for rentals. I was party to one deal where the house was purchased for under 35k and required 15k in fix up and now it rents for 700 a month. After all expenses these houses cashflow and provide a decent return on the down payment outlay. This was in Lake Isabella, CA. Similar deals are common.
Just do not expect to build any equity , if at all as. the housing market is still falling.
There is taxes to pay and insurance and up keep that can cause unexpected or large outlays too.
And remember your down payment may be needed for something else someday , and you lose it and the interest it was making.
If you can partially rent out or share rent with someone, then I would say it is possible as rentals are a huge growing segment of the housing purchases.recently. sort of a hybrid purchase.
If you know you will be able to afford a house then this is a good time to buy as prices are low and interest is too. Just go in with your eyes wide open.
"I would say buy only if you have enough money to buy it and not borrow.
Times are tough still and getting bogged down with expense can ruin everything you have and jeopardize your savings. "
I agree with you that people should live within their means. But you make is sound like if someone doesn't buy a home they have zero housing expense. Of course that isn't the case for most people. Most people that don't own a house is renting a house or apartment.
What If you can buy a house with a monthly mortgage which is lower than what you are paying for rent?
Everything I have seen says we are going to dip down 5-10% before it goes back up.
(RA) MBA, e-PRO, REALTORÂ®
East Oahu Realty
During inflation house prices may start to stabilize or even rise in certain locations.
If the economy gets worse then owning property will be a liability if you have a mortgage that can kill you, or worse negative value on your home
I would say buy only if you have enough money to buy it and not borrow.
Times are tough still and getting bogged down with expense can ruin everything you have and jeopardize your savings.
Houses are a real value in today s market , and interest rates are low , so investing in a rental is always good, as renters are overwhelming the housing market.
A modest recovery could be the most anyone could hope for at this time.
Remember when deals get really good, everyone will start in buying again and then the market will climb.,
and that is not happening yet. Foreclosures are at a record high and maybe at the end of 2012 it can start to level off.
the banks hold record amounts of foreclosure homes and they will not release them all to keep the market value as high as they can. If they suddenly released everything the market will drop more and if you buy now it would be a disaster.
so to answer your question, I would wait a bit longer as too many unclear variables are pushing the market even lower at this time, and the bottom of the market is not yet in sight.
Warren Buffett is a tough man to bet against. I agree with him!
Good Luck !
Serving Maryland, D.C. and Northern Virginia
Even though the number of cash buyers has increased dramatically recently, my metric for likelihood of a recovery comes down to this: "Is it easier or harder for a homebuyer to get a loan today than yesterday, last month or last year?" Unfortunately, the answer is "harder" for all three.
Until this changes, qualified buyers exist in smaller numbers and that means less competition for inventory, which means lower prices which means more distressed owners, and so on. There does not seem to be an appetite in Washington or on Wall St. to do anything that would break this dynamic, so for now and for at least this year, I see the same patterns playing out. While I write this, Fed actions are causing rates to rise, there are plans to dismantle Fannie Mae and Freddie Mac, and the FHA is jacking its mortgage insurance premiums. All of these are bearish for home loan availability and affordability.
We'll get out of this, and The Phoenix (and Phoenix...) will rise again, but there are still strong headwinds out there for 2011.
Keep the faith,
Mr. Buffett makes some good decisions and not all are great, but a lot of people put good stock in what he says, and that alone can move a market. For me, a promising job market will be the key.
Keeping my fingers crossed!
I agree...The lack of new construction is a major factor which is often ignored. I have read that new construction isn't even keeping up with units being destroyed (catastrophic loss, decay past the point of repair, etc...) let alone keeping up with population growth.
Fingers crossed for a slow and stready recovery....the kind that will maintain a solid foundation for healthy growth.