The long and short of it is, maybe if we wait a few more months to a year, the prices will come down to where we can COMFORTABLY afford the mortgage payment while still enjoying the freedom to buy the things we want and need when we want them.
I will almost certainly buy in 1-2 years. I am not waiting because the media tells me that things are bad; I am waiting for several reasons, one of which is that I have every reason to believe that prices will decrease in the next year. I have the internet and I can, and do, research my areas of interest on my own. I have to do a little digging, but between Zillow, Trulia, and my county's property site, I can generally see what is for sale & what has sold- and most importantly, the price at which a given property sold.
In other words, please don't assume that buyers are sitting this time out only because of media "gloom and doomers". It is very easy (although a little time consuming) to be a well-educated buyer. I can see a trend line in my area indicating that sale prices are decreasing.
Also, I know from reading up that in most real estate cycles, prices bottom then stay flat for a while. So I am not at all worried about "missing" the bottom. I also know that an increase in interest rates is quite likely, but that chances are good that prices will adjust accordingly (e.g., prices decrease when interest rates increase, providing that overall housing prices are in line with affordability ratios- and this entire correction seems to be settling near the prices lines of affordability).
Right now, I am content to rent and continue to save up money for a downpayment. I am not concerned about throwing my money away on rent *at this time* because my observation is that prices are going down and my savings are going up. (Also, prices are only one reason I am renting- I am also starting a new job/career path, and I think it's wise to see how this goes before making major financial purchases).
So, this is a long response merely to say that for some future buyers, in some areas, now really just isn't the best time to buy. Also, to indicate that with the internet and so much information, it's pretty easy for buyers to do their own research. I don't mean this to be offensive, but I believe that it is always Buyer Beware, so I am much more comfortable doing my own research, rather than relying strictly on someone who only makes some $ when I make a purchase. I don't mean to denigrate Realtors- there some excellent Realtors, in fact I have one in my family. But in any big event in life- medical, financial, anything! just by my personality, I feel better doing my own research and getting multiple opinions.
Lastly, I am not an "anti-Housing" person. I believe that buying one's house is almost always in one's best interest, financially and maybe even emotionally, if one is ready to put down roots. I just think that we are in a rare period of time when one can come out ahead financially by waiting another 365-750 days to make this huge purchase. At the very least, I don't think I'd lose much financially by waiting, especially as I have a pretty nice and quite inexpensive rental that allows me to save. Since I also have an emotional component that indicates that it is better to wait (e.g. I will feel more comfortable having the flexibility to easily leave the area if my job doesn't work out), it is clearly better for me to rent. For others, especially for people with kids, I can see how the emotional aspect my outweight the financial aspect, especially if the plan is to stay in the same house for 7+ years.
Thanks, Todd Norsted
I don't believe any Realtor has a crystal ball. Therefore, who knows exactly when we hit bottom? For all I know yesterday was the lowest day for home values.
Now is an excellent time to buy. If you're waiting for that 'perfect' time to buy then you'll be kicking yourself once prices start to rise. You can't fret over 1 or 2 percent in real estate because it's never been an exact science (or never will be).
If you were to ask me what I think - I'd have to tell you - continue renting until you have enough money saved for a substantial down payment and a mortage you can afford. Fun is an important part of a happy life - no matter where you live.