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.
> 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.
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.
Best of luck to you.
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.
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.
All the best!
Ryan Smith from Temecula, CA
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.
Scott Miller, Realty Associates, Boca Raton, FL
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.
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.
Best of luck to you...
Prices are ticking up here on Cape Cod. Rates can't get any lower. Find a great deal (they're everywhere!), and BUY.
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!!!
It's LOW INTEREST SEASON --------------
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???
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.
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.
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!
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.
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
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 :)
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.
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.
â€¨â€¨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.
â€¨â€¨If you're a current or former member of the military you should definitely look into it. VA loan options are great. â€¨â€¨
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.
â€¨â€¨Best of luck to you.
This really points out the differences between price and mortgage interest rate.
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.