Shall we rent and wait a little longer for the real estate market to stabilize, or buy a home now?

Asked by Peng Yu, 46204 Mon May 5, 2008

Thanks much to all of you who have answered my previous questions! Here is another interesting question we have been been searching for an answer...

We have been watching the statistics of the real estate market in central indiana, in particular, Zionsville and Carmel. We see fewer houses sold (or pending for sale) and more listings on Market in both Feb and March of 2008 than in 2007. Given these statistics, is it better for two of us who do not own a house right now to rent for another few months or half a year before buying a home?

Thanks in advance again!

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Trey Bowden’s answer
Trey Bowden, , Edmond, OK
Thu May 8, 2008
Peng Yu,

There are an abundance of rent-vs-buy calculators on the Internet. If you haven't used one of these try this one:…

Once you are more comfortable with buying then it's time to find a local mortgage provider and schedule an appointment. Sit down and talk honestly with this person. They will be able to provide you with specifric information that will help you make the best decision.

Good Luck!

Trey Bowden
(405) 340-3277
1 vote
Eric Karrfalt, Agent, Noblesville, IN
Mon May 5, 2008
It's always a balancing act if you’re trying to time the market. If you buy in the future, how are rates going to be? If you buy now, are you going to get a good deal? I would suggest that rates are at historic lows and there are plenty of buying opportunities now. To top it off, there are plenty of repo and corporate owned homes on the market that are being discounted. Statistics will give you the general state of the market but you really need to define what property you want before making a decision on general statistics. There are certain price ranges selling quite well in Zionsville and Carmel. Certain communities are selling as well. Looking at year-to-year averages, our market continues to grow. Looking at just a snapshot of 2-3 months market statistics gives an unrealistic picture. We are still in one of the top 5 years, historically, in the home market here. There are simply more buyers coming here every year. The reasons are many for this, but generally speaking housing and lifestyles are good in the communities you mentioned and population is growing.
The metric you expressed can be defined as: Months of Inventory based on Pended Sales. It will give a month to month accounting as to how things are doing. For Carmel, things have been getting better each month, contrary to what you have said. 1/08 was 9 months, 2/08 was 7.3 months, 3/08 was 6.8 months.
Contrasted to last years Months of Inventory based on Pended Sales: 1/07 was 6.6 months, 2/07 was 6 months, 3/07 was 5.3 months. 4 months of inventory or less was typical of our best years ever, so 5-6 months in today’s market shouldn't be viewed as that bad. I guess where I'm going with this is that things are not as bad as what you might believe if you just listened to the media.
Now given your analysis of more inventory and fewer sales, this translates to a buyers market. If homes are not selling and inventory increases, pricing will come down as the market dictates. I'm not really worried about the market totally dropping around here. The Indy area has always been pretty stable, no huge run ups and no huge losses. So do the math. A stable market, historically low rates, increasing inventory, sales dropping. All these add up to buying opportunities.
1 vote
Erik Armstro…, , 47802
Wed Dec 2, 2009
Simply said, if you are thinking about buying the operative word is NOW. Sales prices are still down, interest rates are still low, plus the $8,000 tax credit has been extended and expanded to now assist qualifying home sellers with up to $6,500.

In a few short months we don't know for sure what will happen to the market. Sales prices may go up, and interest rates may go you may end up not being able to afford as much home as you can now. Many markets are showing improvements already.

The NAR (National Association of Realtors) posted just yesterday on Twitter that Pending Sales have seen 9 consecutive gains, so it just goes to show you that things are getting better in many markets. If your waiting to buy in a "more stable market" you may miss the low and sell high.
0 votes
Kristie Smith, Agent, Indianapolis, IN
Tue Dec 1, 2009
Now! Now! Now! If you buy now, you would qualify for the $8,000 or $6,500 tax'd get under 5% interest rate...and, prices are only going up now that the market has stablized!!

Don't wait!! Depending on your price range, data varies. Let me know what price you are in & I can run specific numbers. Thanks.
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0 votes
Linda Spreaf…, Agent, Pismo Beach, CA
Thu Jul 23, 2009
On the Central Coast of California, we are seeing less on the market and more sales since April of 2009.
0 votes
Jeremiah M.…, , Indianapolis, IN
Tue Jul 14, 2009
Two very big considerations that would lead me to say it is time to buy right now.

1. First Time Home Buyer Credit - Lesser of $8,000 or 10% of purchase price - this amount reduces after Modified AGI of $75,000 for a single borrower and $150,000 for Joint Returns, and is completely eliminated at $95,000 for Single return or $170,000 for a joint return. Modified AGI - just add some foreign income back to the AGI. This credit is set to Expire Dec. 01, 2009. This points to the fact that you have free money by purchasing now.

2. The Federal Reserve is set to stop buying Mortgage Backed Securities on Dec. 31, 2009. This is in a large part what has kept interest rates artificially low to this point. After the Federal Reserve stops buying the rates could head back up to the mid 6's very quickly. As an example rates are presently at 5.375% so Let's say that you can presently qualify a house that costs $180,000, if interest rates are to jump just 1% (which is very likely) at that point with a 6.375% rate you would only be able to qualify to purchase a house that costs $161,565. This shows that by waiting you are potentially missing out on the golden opportunity to own a home.

Good luck in your home buying decision.


Jeremiah M. Wean
Lakewood Lending Group, LLC
0 votes
Craig Bartels, Agent, Indianapolis, IN
Thu Jun 19, 2008
Now is the time to buy! Just like Warren Buffet, buy low, sell high. Now is the time to buy, three to five years from now may be the time to sell. Zionsville is growing, just look at the new Anson development at
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0 votes
Marty Smetan…, Agent, Fort Lauderdale, FL
Thu May 8, 2008
Peng Yu, I feel that if any person wants to buy a house to make it their home for years to come that any time is a good time to buy. The difference between now ans March of 2005 is that the choice you have is MUCH greater and the price is much less. Both good thinks! The answer that stated that by the time "stats" reflect the bottom of this WILL be way past the bottom. If you have good credit, saved money for a down payment and want a home start the search. When you walk through the door of your new home you'll know it immediately. Make your best and strongest offer first and use an agent that knows how to present that offer and how to negotiate the best price for you. Pre-qualify with a strong well known lender so that you know how much you can spend comfortably. Have reserve money set aside for home owning emergencies. If you do these things you will find that now is a great time for you to buy your dream. Hope this helps. Marty S.
0 votes
Jeff & Grace…, Agent, Valparaiso, IN
Thu May 8, 2008
By the time you see a change in Market Stats ( which is retrospective data) the curve may be going back up. If the supply of homes is higher and the demand ( less buyers) is lower - your possibliites for negotiating a better deal may exist. If you keep watching the statistics, this window of opportunity may pass you by. Property History is important ,so you don't get caught up in an offer where a short sale is necessary and extends the decision time to several months...and then the bank says no... and a different market place exists when you go back out to start looking all over again. A Seasoned and Qualified REALTOR will present area market data and research the listings you select on paper first, to help you make an offer that will close successfully. THE REAL WORK nowadays, starts AFTER a deal is successfully negotiated --- it is getting through the process of multiple inspections, appraisal, titlework and survey issues and the ever increasing tightening lender/underwriting stipulations.... Best Wishes whatever your decision is..... to buy now or wait.
Grace M. Safrin CRS, Broker Associate
F.C.Tucker Advantage Realty
0 votes
Linda Spreaf…, Agent, Pismo Beach, CA
Mon May 5, 2008
Our market in San Luis Obispo, County.
We are still down in a few area's, however we are more protected, as we are a beach community, with a wonderful college, that always keeps us moving. I personally feel that we are at the stabilizing time, and property is moving, but you are still not to late to purchase at a great price.
0 votes
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