Home Buying in San Francisco>Question Details

Lynn Move, Home Buyer in San Jose, CA

is this a good time to buy?

Asked by Lynn Move, San Jose, CA Tue Mar 31, 2009

Help the community by answering this question:


As you can see...it depends on who you ask.
and quite frankly...YOU are the only one who can answer this question for YOURSELF.
Web Reference: http://www.321advantage.com
1 vote Thank Flag Link Wed Apr 1, 2009
Hi Lynn, I think it's the best time to buy in the last 3 decades. So says David Bach, the author of many real estate books, who has also been on Oprah. Many buyers and agents wish they had the money to buy right now.

With values being down and rates so cheap, it's the best possible combination. Get pre-approved and find a very good agent to work with.

Good luck,

Dave Tap Tapper
Cashin Company
Web Reference: http://www.TeamTapper.com
1 vote Thank Flag Link Tue Mar 31, 2009
Sure it is Lynn. But there are always a lot of factors to consider. For more information about this question, read my four part blog about the "right time to buy" question. I've included the link below.
0 votes Thank Flag Link Sat Oct 2, 2010
Dear Lynn,

Is It A Good Time To Buy A Home? The simple answer is YES! It is still a good time to buy a home. With the help of the right agent, you can make this "good time" into a "great time" for you and your family. The news is full of stories about the housing crisis, homeowners losing their homes, and the overall bad state of the economy. Not all of this news, however, has to translate into dissuading you from buying a home. In fact, right now is a very good time, especially for some, to jump in and achieve the American dream of home ownership. As of late, the housing market is starting to look better. Read on for more information about why it is still a good time to buy a home.

First, the government is looking to help you. If you are a first time buyer (which, to the government, is defined as anyone who has not owned a home in the last three years), you are entitled to a maximum $8,000 tax credit. Additionally, interest rates are at all-time lows and the Federal government is taking steps to insure and make these loans available to more and more people.

Leverage. Leverage is defined basically as borrowing money to supplement existing funds for
investment. Imagine if you invested ten thousand dollars in stocks and those stocks earned ten percent, you would have earned one thousand dollars. But investing ten thousand dollars on a home, and having that home's value increase ten percent; effectively, you would have earned ten thousand dollars. Which sounds like a better investment to you?

Next, you have to live somewhere. And so does everyone else. According to nationwide statistics, approximately 800,000 new households are created each year in the United States alone. Each of these households will need housing, regardless of the state of the economy. This fact alone ENSURES the recovery of the housing market.

Cycles. The economy is a cycle, and like a cycle, what goes down must come back up. Once this happens, it will create INSTANT equity for you. That means you will have earned FREE money just by living in your home, which you are going to do regardless of where you live. Why not buy a home and earn free money in the process?

Mortgages. Many people think a mortgage is just like paying rent, right? WRONG! With the right fixed-rate mortgage, you are basically ensuring the same payment for thirty years. If you try to rent an apartment for thirty years, odds are that every year or so, your rent will be increased. That does not happen with mortgages.

Ownership. Owning a home is a GREAT accomplishment and it allows you to express yourself in the best way possible. You can decorate it any way you want, furnish it, paint it, and improve it and all the while you will be increasing its value and the value of your investment. Ownership also gives you and your family a sense of stability and a place to lay your roots.

These are only a FEW of the reasons why right now is a good time to buy a home. A qualified agent will be able to answer any questions you may have and also give you more reasons to consider investing in your next home!
Web Reference: http://www.crestico.com
0 votes Thank Flag Link Sat Apr 4, 2009
Lynn, Here are a few resources for information on your market area to help form an opinion.

http://www.sfgate.com/data/ ......... http://www.dqnews.com/Charts/Monthly-Charts/SF-Chronicle-Cha…
http://www.housingpredictor.com/california.html ..... http://www.forecast-chart.com/real-estate-forecast.html
And the Gov. Home Price index report plus a place to watch mortgage rates in case you're told they will go up soon....http://www.fhfa.gov/ ..... http://mortgage-x.com/general/rate_trend.asp

You are considering a large financial obligation and you want to make the best decisions possible to achieve your goals. Take the time to inform yourself enough to be able to know who is working in your interest and who is not. Best of luck, Dunes
0 votes Thank Flag Link Wed Apr 1, 2009
Hi Lynn,
Everyone's situation is different, but if your credit is good and you can afford to...it's a very good time, especially here in California.
There are more homes on the market to choose from than ever before, which has made seller's competative and more willing to drop their prices. We are looking at pricing similar to what it was 4+ years ago before the housing boom. Banks are finally loosening up and lending money again, and interest rates for qualified buyers is at a 50 year low.
Many people are concerned that if they buy now, prices may continue to go down. I don't have a crystal ball but I don't think it's going much lower, and if you wait you may miss this opportunity. If your plan is to stay in your new home for several years, you will gain equity and tax advantages you would miss out on otherwise.

Best wishes!
Terry Crisler
Prudential California Realty
Email: terrycrisler@pruoc.com
0 votes Thank Flag Link Wed Apr 1, 2009
Now is a great time to buy for certain individuals. Speciffically first time home buyers who do not already have a home to sell and have some down payment money.
Interest rates are low and there are tax credits from the government at this time.
You do not, however, want to go all the way. Look for something as a "stepping stone". Remember you need to crawl before you can walk.
0 votes Thank Flag Link Wed Apr 1, 2009
Hello Lynn,

I see people stating that "Realtors" and "Pros" always say it is a good time to buy. Whether it is or is not a good time to buy is really based on the individuals needs. Yes many factors such as interest rates and low prices are good indicators that it could be a good time to buy, however it is not a good time to buy for everyone.

Everyone that purchased a home using "No Doc" loans, could no longer get a home today due to the mortgage climate. So if the question is "Was it better to have purchased a year or two ago when you could qualify, or try to buy a home today and not be able to get one?" If you needed a home and cannot buy one today, what would have been the point of waiting? You never how the market will turn, sometimes you just have to do what is right for you at the specific time. (All of this is regardless of what everyone thinks about "No Doc" loans and or Adjustable Rate Mortgages)
Web Reference: http://www.c21infinity.com
0 votes Thank Flag Link Wed Apr 1, 2009

It is our opinion that this specific period of time is one that will be responsible for creating many millionaires. The records will show these individuals were buying "smart" not sitting on the fence.

To answer your question.......It is "the perfect storm" for buying.

1. sellers are motivated
2. foreclosures and short sales dominate the market
3. prices have dropped dramatically
4. the government is giving away money
5. interest rates are at an all-time low

For people that elect to wait........they will not have the selection to chose from, they will miss out on governmental assistance, prices may not be as desirable, and interest rates should increase..........
0 votes Thank Flag Link Wed Apr 1, 2009
Plenty of more time till we see bottom. Realtors ALWAYS say it is a good time to buy.


"How much further will prices fall across the country? Nobody knows, of course. But history says the bigger the bubble, the bigger the crash.

Those "professionals" in the market continue to be wrong-footed. Early last year I wrote that even though prices in Florida and California had collapsed, those markets were still overvalued. Naturally I was on the receiving end of lots of angry emails from real estate brokers who told me I was an idiot (or worse). Events since then have borne out my analysis.

(Incidentally: During the bubble, did a single broker ever complain to a media outlet that reporters were being "too optimistic" about house prices, or were "talking the market up" during a dangerous mania?)

House prices nationwide have now fallen about 30% from their 2006 peak. At these levels the contrarian, inevitably, starts to wonder if they have fallen far enough."
0 votes Thank Flag Link Wed Apr 1, 2009
If we knew the answer to that there would be a lot of retired realtors sitting on big bank accounts! I think most realtors in SF believe that we're at or near bottom. We may have even passed the worst of the market this month. Sales seem to be increasing this month.

I'm invested in the market and know many of my peers that are in the same position. My buyer clients are faring quite well as are many of my seller clients who are realistic about pricing. Thankfully, San Francisco hasn't seen big declines in all neighborhoods.

Shaban Shakoori
TRI Coldwell Banker, SF's #1 Office
0 votes Thank Flag Link Tue Mar 31, 2009
It depends on where and why.

There are many homes being bought by investors so if you're one of them it's a good time. If you have saved and are ready to buy, have solid documentable income it's a good time if you are buying using a confomring loan.
0 votes Thank Flag Link Tue Mar 31, 2009
Jed Lane, Real Estate Pro in San Francisco, CA
IF it's a good time for you, then this is a fantastic time to buy a home.

It can be a good (or bad) time to buy (or sell) in any market. It depends on your individual situation so much.

If you have been saving for a down payment and feel good about your job, then I'd say, "Go for it!"

No one will know when we've hit the market bottom until it's long gone. We are either here now or close so take advantage of the reduced prices and amazing interest rates on safe loans. Cheap money and cheaper prices rarely go hand in hand.

Best of luck,

Danielle Lazier, San Francisco Realtor
Zephyr Real Estate
415.731.5000 x158
Web Reference: http://sfhotlist.com/blog/
0 votes Thank Flag Link Tue Mar 31, 2009
It really depends on your personal situation and finances.

I'm fairly certain another 10-20% drop will unfold before this is over (I'm among the more cynical here). That said, I'm actually prepping to buy now, but I have some very specific reasoning for this:

1. The IRS kickback shields me from about 2.5% price drop in the segment I'm looking at (~$300K).
2. I'm married to a public school teacher. A program exists that allows for essentially the same loan as FHA but without any mortgage insurance requirements (on a low down, FHA mortgage = 1.75% purchase price added to mortgage plus 0.55% annual payments). A have little confidence this program will exist in the long-term and I estimate the value of a mortgage sans mortgage insurance at about 8% of purchase price.

... thus, between the Fed and this teacher mortgage deal, I'm shielded from a roughly 10-11% drop in prices assuming the teacher program evaporates, as I fully expect. One or two other programs have already disappeared.

Also, low LOW down payments are still out there and I don't know for how long. With the Fed $8K kickback, you can get into a house for virtually nothing at certain price points. At some point even the stubborn government is going to realize putting people in homes where they're underwater from day one isn't wise. But while it exists, it allows me to keep a substantial cash reserve around to weather anything unexpected. I'll pay a small premium (i.e. absorb some more equity loss) for that comfort. If I had $100K in the bank, enough for 20% down and still enough for a big buffer - I'd think otherwise. But alas, I don't have $100K in the bank. With the low down I figure I'll be underwater for 3 to 7 years but can live with in exchange for starting out with a substantial cash reserve (provided I find a home matching my budget and anticipated needs for 10 years -- we shall see).

Finally, for our personal goals, buying a home fills in the final question mark of our personal budget. I won't need to continue saving towards an unknown down payment percentage on unknown priced homes at some point in the future. Easier to budget our lives that way, which again... worth another small premium to me.

So despite the fact I think many people would be better off waiting for (what I believe to be) additional inevitable price drops, like me you may find reasoning that makes is practical to consider buying. If we don't find what we want we'll shift back gears and wait but, in my circumstances, it might make sense to buy even in the face of continued declines. Guess I'll know after I start viewing homes. The answer will be different for every household out there.
0 votes Thank Flag Link Tue Mar 31, 2009

Good question.... What I would suggest is you sit down and really look at why you are considering buying. Are you looking for a place for you to live or are you looking for an investment property? What has prompted you to consider looking now?

There is no crystal ball for the future regarding prices... The only way to predict the upswing in the market is after it has already happened. Local markets vary WIDELY in the Bay Area. I am working with buyers where we have put offers in where there are multiple bids and others where we were the only offer. As you might imagine desirable areas with well priced properties are selling and some with multiple offers. Having an understanding of the local market where you are considering will be very important for you to have a clear picture of the market in that area.

The one thing that is true is interest rates are low and there is inventory available. Being honest with yourself as to why you are buying will help you to evaluate if now is a good time for you or not.

I highly recommend you talk with a Realtor in the area you are considering looking who will be able to help you take a look at the local market and who will be able to provide you data regarding sales so you can make an educated decision. Talking with a lender who will sit down with you to discuss the different loan options and scenarios is also very important. This will help you have an understanding of the price point at which you are comfortable with the monthly payments.

Hope this helps!

Lisa Cartolano
Alain Pinel Realtors
0 votes Thank Flag Link Tue Mar 31, 2009
Prices are set to drop more so I would wait for now.

Record declines are occurring: "Standard & Poor’s Case-Shiller Home Price Index, a widely watched measure of 20 metropolitan areas, fell 19 percent in January from a year earlier. That was a record drop, slightly edging out the previous month."

0 votes Thank Flag Link Tue Mar 31, 2009
The million dollar question! Obviously, as a real estate sales professional, I'm going to say Yes! But, that is because I know the industry well and positive direction it's taking especially for first-time home buyers. You may or may not be in that category but one thing is for sure. The buyer is now more than ever in the driver's seat of the home ownership vehicle.

Why I say this is because there have always been good to great "deals" in homes that have been out there. They were there in even during the market boom period, relative to that market. But, what's more important now is the mortgage affordability factor that has severely tilted it in favor of the buyer.

Most buyers don't realize upfront but it's not necessarily what price that home is costing right now but how much will your payment be on it that becomes a more important factor.

For instance, if you have a home that who's price I've helped negotiate for you at $200k and you're getting a mortgage on it at 6% vs 5% for a 30 year fixed amortization, which is round about the rate as of Mar 31, 2009. Your monthly payment difference on the same home will be over $125 a month for 30 years. Another way to look at this would be that for the same payment at 6% interest rate you can now afford a home costing $225k vs $200k, just because the interest rates is around 5%.**

This is not even better as the government is giving qualified first-time home buyers $8,000 as tax relief for year 2009...
.. hence, this is the BEST time to buy a home, in a long time.

**I'd recommend you to get with a mortgage broker to find out more about interest rates should you so desire.

Hope this long answer was of some assistance.

AJ Agarwal
Buyer specialist Realtor.
Jacksonville, Florida market.
0 votes Thank Flag Link Tue Mar 31, 2009
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