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Shannon Mulr…, Home Buyer in Colonialtown North,...

IS THIS A GOOD TIME TO BUY A HOUSE OR WILL IT BE BETTER IN THE FALL?

Asked by Shannon Mulrooney, Colonialtown North, Orlando, FL Sun Jun 20, 2010

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If you are a buying as your principal residence, the real cost is the mortgage rate you are paying and interest rates are the lowest since 1971. While it is possible that prices can drop further from here, it is also just as likely that rates will increase, causing you to pay more in the long run and effectively negating any short term savings on a price drop.

Let me use and illustration that I've seen elsewhere (thank you Endre!) Let's say you buy a $1 million dollar home today.

Sales Price $1,000,000.00

Down Payment $ 270,250.00

Loan Amount $ 729,750.00

Monthly Payment on a 30 year fixed at 5.125% $ 3,973.00

If prices drop 10% in home values and today's $1 million dollar home sells for $900,000.00 a buyer would have been wise to wait if interest rates remained the same. However if the interest rate increased 1% the structure of the deal will change:

Sales Price $900,000.00

Down Payment $200,000.00

Loan Amount $700,000.00

Monthly Payment on a 30 year fixed at 6.125% $ 4,253.00

So, in general the best time to buy a home is when you are ready for it. Usually finances are only 1 part of the consideration. The size of your family, job situation, relatives, and roots are also factors. If you are buying as an investment, rental rates and mortgage rates are the most important factors.
4 votes Thank Flag Link Thu Jul 1, 2010
>Unfortunately every fortune teller that's tried to predict the
> real estate markets in the last several years has failed miserably.

Anyone who said, like me, that home values would track consistently downwards over the past few years was spot on. That wasn't hard.

To answer your question, Shannon, I've never met a Realtor(R) that said it was a bad time to buy.

That being said, it's very easy to take a group of readily apparent, easily observable facts and arrive at a pretty confident conclusion.

There is hardly a housing shortage out there. The employment picture is bleak. Income growth looks negative. So what magical force is it exactly that's going to vault home values up? And in Florida no less?

You're on the right track regarding a fall purchase. Home sellers today have to go no further than the nightly news to see that new home sales last month were down 33 percent to a new all time low. (May data.) Ditto for existing home sales. Down.

So the question is, if people can't sell their homes in the "high sales season," what are they going to do when the summer passes their homes by with nary an offer?

Capitulation. I think you'll be able to drive a harder bargain if you're flexible and can hold off until Fall/Winter.

What we're experiencing is the unwinding of the largest speculative bubble in the history of the world. If you look at prior real estate downturns, home values generally revert to pre-runnup pricing and then bounce along the bottom for a number of years prior to any up-momentum being formed.

Good luck!
-John
3 votes Thank Flag Link Thu Jun 24, 2010
Take a look at the site below. Then make up your mind on what to do.

http://www.housingpredictor.com/florida.html

the housing downturn is anything but over in Florida, which has seen prices fall nearly half from their peak highs. Record foreclosures are putting a drag on markets. The inventory of foreclosures and bank assisted short sales, in which the lender cooperates to reduce the mortgage are only projected to put further pressure on prices.
3 votes Thank Flag Link Sun Jun 20, 2010
Oh be honest already!!!!! Prices will decline in 2011. It is true that interest rates are low but one cannot avoid the fact that we have so much foreclosure inventory that will put further downward pressure on the market. I am a real estate agent and make my living by selling home.......but I must be truthfull and say that if I were you I would certainly wait until the new year. I know I will take heat for saying the above but we owe it to our clients to be brutally honest.

Best of luck to you.
2 votes Thank Flag Link Mon Nov 15, 2010
Hi Shannon,

You just threw a piece of flesh in the shark tank. This question really comes down to what is better for you. Hindsight is 20/20, and no matter when you buy there will be positives and negatives. Yes, interest rates will eventually go up, but they've been low for years now. Yes, there are some great deals but there is an extremely high percentage of homeowners currently behind on payments so there could be more and better deals coming. Buy when you are ready, you will know when. Best of luck to you.
2 votes Thank Flag Link Wed Sep 15, 2010
With interest rates being at their all time low this is a great time to purchase a home. So long as you are sure about your employment stability and you have at least a years' amount of cash in reserve and no debts other then your basic utilities.
2 votes Thank Flag Link Sun Sep 5, 2010
I'm in the wait-and-see camp. If you are relocating and need to settle the family in a home, buying now is good. If there isn't the pressure of time, you have many things working in your favor: 1) rates are low and seem to go down every week or two; 2) inventories in most areas is fairly high and the shadow inventory (REOs, sellers needing to list) is only going to keep the number up; 3) sellers are dropping prices in most markets. Until one of these three trigger an opposite effect, take your time. When you are ready to make an offer, be aggressive. If you don't ask, you don't get.

Good luck!

-John
2 votes Thank Flag Link Thu Sep 2, 2010
And just because you BUY LOW, doesn't mean it will go up tomorrow, next month or next year.

Things can get worse.

Remember, the guy next to you who also bought the exact same condo may have a different mindset or different size wallet then you do. They may be less greedy. They may turn their unit into a rental. They may have bought EVEN LOWER then your "I bought it low". Maybe you bought it from someone who also bought it low...

Consider all places for parking your money. Renting in some instances today make more sense.
Web Reference: http://www.rentlaw.com
2 votes Thank Flag Link Fri Jul 30, 2010
I personally would wait just a little longer, housing prices are still falling!
2 votes Thank Flag Link Tue Jul 27, 2010
Shannon...the best time to buy is when it's right for you. Yes, you can try and time the market and buy when it hits rock bottom, but the problem with that is we will only know when this occurs once it's too late. Mortgage rates are at an all time low and prices are great. These are factors that may make your decision easier, but you will know in your gut when the time is right for you.

All the best!

Ryan Smith from Temecula, CA
2 votes Thank Flag Link Tue Jul 27, 2010
Hi Shannon. I didn't see this question until now or I would have answered sooner.

The answer to your question is that this is a GREAT time to buy a house, BUT.......it will be better 6 months from now. If you want to count the last 71 answers to see how many other agents agree with me, you're going to find me in the minority. Definitely. But I'm sticking with my answer.

There's tremendous downward pressure on prices. The real estate economy is not getting better, it's getting worse. Prices are still sliding. More bank foreclosures and REOs are on the way. More foreclosures in my state of FL now that HOAs can and will foreclose quickly if you're behind on monthly payments to them.

Check back here in 6 months and see who was right.

Once upon a time, I told a group of agents at a continuing education class here in Boca (2005) that we're in a real estate bubble. Everybody was shocked. Guess what? I was right for all the same reasons.

GOOD LUCK!!

Scott Miller, Realty Associates, Boca Raton, FL
2 votes Thank Flag Link Fri Jul 23, 2010
There are a few things to consider when deciding to purchase a home. One is how much house can you afford? At the moment prices are low and so are interest rates giving you much more bang for you buck.

Sit down with a lender and get pre-qualified. Serious buyers have more clout at the negotiating table. Also, find an agent in your area to work with. Having an agent also gives you someone who is looking out for your interests.

If you find the right home at the right price, you will know that it is the time to buy.
2 votes Thank Flag Link Fri Jul 2, 2010
As a short sale agent, If I were in the market to buy a home I would wait. While this may not be a popular answer I am seeing declines in value every month. In the fall a buyer will not have the competition for homes they do now. Experts told us rates would be going up and as usual they were wrong. We buy cars and know that they depreciate the minute you drive them off the lot, houses at this time are the same way. I say wait.
2 votes Thank Flag Link Wed Jun 30, 2010
One in just over 170 houses in florida received a foreclosure notice in May.

What will happen in June, July, August, and September?

In many areas prices should go lower. In some areas it will be higher. Overall expect better prices by waiting.
2 votes Thank Flag Link Tue Jun 29, 2010
Pamela, this is not a "time sensitive" question. The purpose of this site is to help keep the consumers informed of TODAY'S real estate market. That is what most of the agents that I have read are trying to do. We would be as guilty as the press if we just rely on OLD NEWS. So, yes, from the years that I have been working with Trulia and Zillow and other sites the realtors do read the date - but the ones with their customers in mind can determine the time sensitive questions versus those that will always be on a buyers or sellers mind.
1 vote Thank Flag Link Thu Dec 16, 2010
Yes now is a GREAT time to buy! Prices are low, and rates are lower! We are starting to see a jump in the interest rate so waiting out the market could actually end up hurting a buyer in the long run of a loan. So if you can buy now I would find a GREAT Realtor and find that perfect home for you!
1 vote Thank Flag Link Wed Dec 15, 2010
If you haven't purchase a home yet... get up and get a move on! Rates are low... the Fed doesn't plan on raises rates at the moment, but they will review their plans again in 30days. I say... get a loan and lock your rate now!
Best of luck to you...
1 vote Thank Flag Link Tue Dec 14, 2010
Yes, if you are thinking of buying a home it is time to get off the fence. The deals are gone. The interest rate is inching up. Things that look like deals today ARE NOT. They are just inviting you to get into bidding wars. If you are going to be financing a home then it is time to make your decision. Find a property in the price range that you can afford and then make at least a 92% offer or better. We are now seeing full price offers turned down because of bidding wars.
1 vote Thank Flag Link Tue Dec 14, 2010
The time is NOW. We are experiencing a "perfect storm" for Buyers: home prices are low (really low!) and interest rates are low too. We haven;t seen conditions like this for decades. Yes, rates have been low, but home prices were relatively high. When home prices were low, rates were high.

Prices are ticking up here on Cape Cod. Rates can't get any lower. Find a great deal (they're everywhere!), and BUY.
1 vote Thank Flag Link Mon Dec 13, 2010
Shannon, I am in Miami and an estimated 700 single family homes are closing a month here. the economic indicators are showing a slower but better economy. Mortage rates are creeping up which is a sign of recovery. This spring selling season in Miami will be a very good this year and the window of quality SF homes are becoming harder to find.

I feel the window of opportunity will start to close this year. No one can predict the top or the bottom in any market,however when rates rise and prices rise you have missed the bottom.

My feeling is this in a nutshell. As a 40+ year resident of Miami and 19 years in the real estate business. We will never see in my lifetime the following :

1. Mortgage rates in the 4 % range

2. Amount of inventory to choose from today

3. And prices this low in Florida.

As financial advisor for over 13 years I look at economic indicators,bond markets,stock markets,new and pending home sales to get a reading on the pulse of the market.

My best advise is to CUT your best deal and Buy!!!
1 vote Thank Flag Link Mon Dec 13, 2010
BEST TIME TO BUY! iF YOU HAVE ENOUGH CASH TO MAKE IT HAPPEN THEN GO FO IT!!

GOOD LUCK!!

FERN HAMBERGER
fhamberger@citi-habitats.com
646-660-0060
1 vote Thank Flag Link Sat Dec 11, 2010
It is a great time if you don't need to move soon! Find a good agent that can provide comps and assist you!
1 vote Thank Flag Link Fri Dec 10, 2010
Hi Shannon!

I have reconsidered my previous answers ~ Now is the time to buy! Fall may never arrive.
1 vote Thank Flag Link Wed Dec 8, 2010
Everyone needs to stop the chatter about the seasons:) If a home is priced right and marketed well it will sell in any season. Well maybe there is a season to pay more attention to.......................

It's LOW INTEREST SEASON --------------
1 vote Thank Flag Link Sun Nov 28, 2010
The time is now to buy. Don't wait.
1 vote Thank Flag Link Fri Nov 26, 2010
Joan B. : I would suggest the biggest reason people keep answering is, there will always be some one who just tuned in.... so, it is for their benefit. I do think the question could be updated though. LOL....
1 vote Thank Flag Link Fri Nov 26, 2010
This is beyond hilarious that this question was asked towards the beginning of summer and here we are headed towards winter which makes the question kind of a moot point but people insist on answering anyway.

Please just save yourselves the trouble because its all been said before, and between this thread and this one: http://www.trulia.com/voices/Home_Buying/Is_NOW_really_the_t… there are over 500 answers to ponder.

Do you all really think that more needs to be said on this topic???
1 vote Thank Flag Link Fri Nov 26, 2010
I agree with Gabe on this : we need to be buying real estate according to our need for a home and not for keeping up with other people. like the neighbors.
1 vote Thank Flag Link Tue Nov 16, 2010
Sharon you will know it in an instant, It is when time meets opportunity. When the need is stronger than a dream. You will make that dream a reality.
Real estate is not greed based. It is need based. GREED destroyed it NEED will restore it.
Owning a home is a dream worth dreaming about.

When the time is right the decision is right.
Good Luck,
Gabe
1 vote Thank Flag Link Wed Nov 10, 2010
We realtors believe there is a good time to sell and good time to buy.
If it is good time for you, it's a good time for us..

For that Warm & Fuzzy Feeling Adopt a Realtor in a Pet Shoppe Near You.
We come in all shapes and sizes and some of us even have pedigrees.
We have received our shots and are very safe. We only bite when we are irritated.
We are house trained and so eager to please. Every house should have at least one.
Take one home with you today. The life you save could one day save yours.
1 vote Thank Flag Link Tue Nov 9, 2010
Shannon ...

I don't think you will find one realtor on a real estate information site such as this tell you that it is not a good time to buy. It's ALWAYS a good time to buy, if you are ready, willing and qualified.

Happy House Hunting!
Mike Luzzo
1 vote Thank Flag Link Tue Nov 9, 2010
Even though this question was originally asked in June it is always a good question. It is now November and the recent election is going to affect the housing market significantly. How? We don't know yet. The stimulus package was very good for real estate. Properties finally began to sell and the gridlock stopped. More recently the banks have gotten so stringent on details that even the best credit risks have had trouble getting mortgages. The Republican landslide is going to cause some pretty big egos in the beginning so it should be interesting to see how it plays out - but more importantly to or industry WHEN. It also has a lot to do with WHERE. It is fall and in Florida it is a good time to buy a home. Inventory in downtown St Petersburg and the Historic Northeast area is down. Property is selling because prices are low and so are interest rates. Jumbo loans opened up so we were able to move some of the higher end properties. So, Shannon, if you haven't bought a home yet I am going to recommend that you do so. Also make sure that you are getting the right home at the right price. Make sure you agent does a comparable market analysis and only uses figures for the last three months. Good Luck if you haven't already found your home.
1 vote Thank Flag Link Thu Nov 4, 2010
Shannon,

Like the song from Camelot . Could I ? Summer winter or fall ? No never can I resist for in my house I belong. The temptation is too great with mortgage rates so low. The passion grows.
1 vote Thank Flag Link Thu Sep 9, 2010
If you're buying primarily for housing and not just investment, buy now rather than waiting. At current interest rates it takes a tremendous amount of price dropping to make a significant dent in a payment but the sure to come increase in interest rates can price you out of the market quickly.

At this point, yes, houses might drop more but we are close to the bottom in many, if not most parts of the country so I still have to favor what I know. Houses are cheap, rates are way low and sellers need to make a deal. Don't let fear or uncertainty take hold of you. Buy right on the way in and enjoy your new home.
1 vote Thank Flag Link Thu Sep 9, 2010
I look at it like playing the stock market. The prices may drop or they might go up. If you are buying for the long run go ahead and buy now. The difference in price will not make that big a difference in the mortgage payment overall. If you are trying to do and investment purchase you may want to wait to see if the market drops more, but just know it is a calculated risk either way.
1 vote Thank Flag Link Thu Sep 9, 2010
Housing and Urban Development Secretary Shaun Donovan said Sunday on CNN’s “State of the Union” that the administration would “do everything we can” to stabilize the U.S. housing market. Whether it will resurrect the first-time home buyer tax credit is up in the air. Donovan said that the drop in home sales in July was worse than the administration expected. Donovan also said that the Federal Housing Administration will launch an emergency loan program to help unemployed borrowers stay in their homes and a program to help underwater borrowers refinance.

The financial reform bill signed into law by President Obama may look like a giant cornucopia of helpful changes for homebuyers and loan applicants - not the least of which will be the creation of a powerful Consumer Financial Protection Bureau to ride herd on the mortgage lending industry.

What sort of tangible benefits might begin to flow once the bureau takes official form? One of the earliest - and most widely anticipated changes in the real estate field - will involve appraisals on homes. The law requires the agency to quickly come up with new interim rules on appraisal accuracy and independence designed to replace the controversial "Home Valuation Code of Conduct" rules imposed by Fannie Mae and Freddie Mac in 2009.

-Rick Miles, GRI, CREN
1 vote Thank Flag Link Wed Sep 8, 2010
The Fall is a good time to buy a home in San Diego. Families with kids in school are typically settled in until Spring, which cuts down on the number of prospective buyers. There is also a drop in the number of listings, but sellers who list in the Fall are generally more motivated to sell.
1 vote Thank Flag Link Wed Sep 8, 2010
Buying a home is a wonder. It's when your income, credit, rates prices all line up. It doesn't happen very often in most peoples lives. If it's lined up for you, take action. You may be able to buy today, but who knows about tomorrow? You may kick yourself later for not taking action when you had the wherewithal to do so.
1 vote Thank Flag Link Fri Sep 3, 2010
It is absolutely a great time to buy a house! It's not so much about the price of a home, but about the total cost of owning. Interest rates are the lowest they've been since Nixon was in office, and even if prices were to drop another 10%, the interest rate makes up more than the difference. No one has a crystal ball, but I don't expect that rates will stay this low for long.

Look at it this way - in my market your average 3 bedroom ranch in a good neighborhood is selling now for about $135K now versus $155K a few years ago. If a buyer purchased in 2006 at 6% interest, they're payment would have been over $950. With the lower prices now and today's rates it's more like $750. That's a $200 per month difference - pretty good.

Even if prices were to drop by 10% more, a 1% increase in rates would come up to about the same payment. It's cost, not price :)
1 vote Thank Flag Link Thu Sep 2, 2010
Don't wait to buy real estate, buy real estate and wait! Real estate is always attractive if you plan on keeping it for a while.
1 vote Thank Flag Link Thu Aug 5, 2010
I think my response was pretty generic based on need and ability to buy. It didn't trash any of the typing horses in New Jersey. Can't we all just be courteous?

I do agree, all real estate is local and you should find a local FULL TIME professional who knows your market and can give you good advice.

Just be prepared. The national real estate market is not for the faint of heart. If you need/want a home, the time to buy is when you feel most comfortable, not when me, a Realtor in San Francisco or some syndicated columnist says it's time. By that time, it's generally too late. I generally speak about my market because that's what I know.

Your life situation is the most important factor in your decision making process.

Best of luck to you.
1 vote Thank Flag Link Sat Jul 31, 2010
That is the wrong question. Do you want to buy a house? Do you need to buy a house? Can you afford to buy a house(mortgage, taxes, insurance, expenses)??



The question is, are you a shopper or a buyer? When you go to the grocery store do you go to the grocery store to shop of milk or to buy it? Real estate isn't a sport and it's not for amateurs. The banks are kicking the amateurs to the curb.



Orlando, Houston, San Francisco, Seattle... all different markets. The real question you ask yourself is, why are you buying a house. Don't go looking because you're bored on Sunday. If you're bored, go enjoy the day with family and friends but if your intention is to buy a house. Go meet with a lender, find out what you can afford and go buy a house. Pricing is all about the market.



If you're a current or former member of the military you should definitely look into it. VA loan options are great. 



If you're in the San Francisco Bay area, give me a call at (415)341-8881 if you want some help finding a home. I would be happy to assist you.



Best of luck to you.

Herb
1 vote Thank Flag Link Sat Jul 31, 2010
It depends what your motivation is to buy. If you want to buy to live in a house and make it your home, then I think it's always a good time to buy. If you want to buy a house as an investment, then read this: In 1950 the average house in the U.S. sold for $44,600, in 1980 the average house sold for $93,400, in 2000 the average house sold for $119,600 and currently the average house in the U.S. is about $180,000 plus the fact that interest rates are at historic lows.
1 vote Thank Flag Link Fri Jul 30, 2010
If interest rates remain low - fall will be a better time to buy and winter even better - at least here in Minnesota.
1 vote Thank Flag Link Sun Jul 25, 2010
There are generally fewer buyers out in the summer which gives you a bit more opportunity in discussions. Sellers who have fewer showings are more receptive to buyer requests. Activity usually picks up in the fall.
1 vote Thank Flag Link Fri Jul 2, 2010
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
I don't think anyone really knows what is yet to come. Right now the interest rates are begging for home buyers. I jumped on board and closing on my own home in August. So I say, Yes! Its a great time to but a home :)
1 vote Thank Flag Link Fri Jul 2, 2010
Thank you Drew for the example.

This really points out the differences between price and mortgage interest rate.



Kind Regards,

Jackie Fortier
Cinderella Realty
863-450-6449
Jackie@CinderellaRealtyFl.com
1 vote Thank Flag Link Thu Jul 1, 2010
Mark Evans, you hit the nail square. Shannon, timing is everything and if this is the time for you then you can take advantage of very lucrative rates and prices lower than they have been in a long time. Some think that investors are snapping up all of the great deals. Well if you are looking at some foreclosures such as those offered by Fannie under the HomePath program, investors are not even considered the first 15 days of the life of the listing! Only owner/occupant offers can be considered during this time and there is a document that must be signed by all parties including the agents that the buyer will occupy, complete with a $5000 fine if you provide false info!
1 vote Thank Flag Link Sat Jun 26, 2010
I believe that sellers are more inclined to drop in price now since they know they missed the Tax Break Deadline and showings have dropped dramatically, with interest rates still low and sellers more inclined to drop in price I feel it's a great time to buy! Good luck!
1 vote Thank Flag Link Tue Jun 22, 2010
Wish I had a crystal ball that could tell you yes or no Shannon, but one of the key factors to finding a great value is in TIMING and we are seeing so many positive reasons to buy now that if you have been qualified for a loan then why not go shopping? Sellers who have been waiting for a better time to put their homes on the market are doing so now and adding to the available bankowned inventory. Also, distressed homeowners looking to "short sell" their homes are finding banks working more aggressively with buyers to turn the properties more quickly for thousands less than originally sold. We are also finding home sellers and banks willing to pay a portion of your closing costs and we are quick to help you secure the best terms possible.
Factor in the great FHA lowered down payment program and continued low interest rates for loans and you've got some great reasons to move forward NOW!
Our agency is located downtown and although we actively work in all Central Florida communities we are closing a large amount of inventory in Colonialtown, Thornton Park and Delaney Park - just to highlight a few communities where home seekers love to buy. Our website is full of wonderful property buys and our realtor guidance will help you compete to find a great home no matter when you begin your search.
Web Reference: http://www.MyMetroCity.com
1 vote Thank Flag Link Sun Jun 20, 2010
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