The market is like a roller coaster BUT i do think in the long run it's a great time to buy. In the long run real estate in LA is a safe bet.
The Carrabba Group
Keller Williams Hollywood Hills
If you have a definitive need to buy a home, and will hold onto it for years (no one ever really knows for sure), it is the best chance you will have at being better off buying now.
Everyone wants a bargain, or the best deal they can get but i would not view a primary residence as an investment. If you factor in the current very low interest rates, lower prices in general across the board, and for most people - a mortgage interest tax deduction,...and many anxious sellers - you may find you can strike a better bargain than you expect.
If the buyers credit simply dies a natural death what will happen? House prices will DROP (at least enough)to make up the same $8k. The first time buyer pool is effectively drained by now. All of the frenzy in the past few months did that. Hud is going to be having serious financial problems before much longer. They are looking at going from 3.5% down to 5% or more. A lot of people used the $8k bribe along with seller concessions to effectively buy a house for NOTHING down. Some even walked away from closing with cash in hand. FHA has 14% loans now in default at some level.
Unless the program is put back up only QUALIFIED buyers will remain. Most either have a house already OR want to buy at very reasonable prices. Say circa 1999-2000 prices.
How many people are left who have 20% to put down? How many are left with good fico scores? How many are left that want to RISK seeing the house they buy today go down another 10-60% tomorrow? Finally, how many people have the income to pay for a house, AND trust that their income will stay.
Unemployment is to high. The GOOD news was that only a little over a half million people got laid off this time. It leaves everyone with a job wondering if they will be in the next half million in the next report. Put in fear of job loss, fear of greatly depreciating house prices, AND limited credit availablity how can you have a very big pool of people to buy at higher prices as we STILL have today? I can't see it.
I can not see how you could possibly buy a house today as an investment and get ahead unless hyperinflation ruins the dollar. Even then you lost money, just the dollar changed so you do not notice it.
The only exception would be if you bought a very cheap repo that no one else wanted. Then it could be possible. But it would need to be exceptionally cheap without major repairs needed.
Great question. Those of us who have watched Real Estate for the last 10-20 years, and who have invested and worked with investors feel that Real Estate is still and will always be a solid investment.(long term)
Real Estate is attractive because home prices have dropped and mortgage interest rates are low, in addition to the first time home buyer incentives. There is also the additional REO and Foreclosure market that is strong as investors are willing to take the risk, that the Real Estate Market will rebound..as it has in times past.
Some investors are waiting, while others are actively buying in this market. It all depends, upon your point of view.