Should I buy now or wait?

Asked by Evelyn Mortenson, Fernandina Beach, FL Thu Apr 10, 2008

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6
Khazeem Asad…, , Dallas, TX
Thu Apr 10, 2008
Evelyn, I think Karsten's post is great, though I disagree. I'm one of those "doomsday prophets" that he is speaking of. I don't believe that we've seen the bottom of this yet, and neither does the former Chairman of the Fed, or the current one, believe this to be the case because there are too many factors influencing this thing that I will not discuss here and now. But I will say this - the housing market is not an island.

The question is - how much did home prices rise above the average income; and what is the "actual" affordability of the average American? We must remember, interest rates have nothing to do with the "cost" of a house. Interest rates deal with the cost of a "loan", and there is a difference. A house is a product that will only sell at a price that a buyer is willing to pay ( or can pay). And a home buyer should buy a home to live in, and not to turn around and try to sell it for a "perceived" profit. If that's what you want to do then you should wait without a doubt.

If you can afford to pay for a home, then buy. But if you can't afford it, then don't buy it. Simple. And if you are concerned with over paying for a home, then my advice is wait or have your home built - thats a 20% - 30% savings off top. And don't let anyone tell you otherwise, you can do this, it is not hard, I do it for my clients all the time, and you will save.

I hope I said something to help you.

Khazeem Asadullah
2 votes
Karsten Torch, , Grayson, GA
Thu Apr 10, 2008
I actually had this answered the other day in an article which I'll try to find before I complete this and send it. Basically, it's a pretty good bet that the rates are about as low as they're going to get. The Fed is already hosing us with inflation by having the rate where it is, and I don't think they're going to drop a whole lot more, if any. And remember, the rates are actually tied to futures. This is why the rate actually went up the time the Fed dropped the rate time before last, and I think futures will drop if the rate drops any more, as well. I know this paragraph is confusing, but it's the best way I have to explain this part of it.

The other side is pricing. Many experts believe we're pretty much at the bottom. There are a few doomday prophets that are foreseeing much worse, but I think they're just trying to stay in the limelight as long as possible. So even though prices may still drop a bit, they're not going to drop a whole lot more. At least in most markets.

Point is, let's say you are looking at a home that used to be $260,000, that you can buy now for $200,000. At 5.5% interest rate. That's $1135 / month with nothing down. Now, let's say the price drops to $190,000 in the next year, but rates are up to 6%. Easy enough for it to do, or even higher. Now you're new mortgage costs you $1139 / month.

Basically, find a home, lock in, and buy a home now. Or look back and be depressed.

Just my 2 cents worth....

BTW - couldn't find the article, I'll post it when I do.
1 vote
Missy, , California
Thu Apr 10, 2008
haha, the million dollar question :)
0 votes
Sandy Shores, Agent, Melbourne, FL
Thu Apr 10, 2008
Evelyn

I think you asked one of the most asked questions in the real estate market today. I googled that question and good oodles of pages of articles on the topic. You may find some of them interesting. http://search.live.com/results.aspx?q=should+i+buy+now+or+wa… am attaching the link for you.

Best wishes.
0 votes
Kathy Seger &…, Agent, Roswell, GA
Thu Apr 10, 2008
It's a great time to buy a home! There are more houses on the market to choose from than in many years and interest rates are low! Why wait?
0 votes
Jacqueline F…, , Kissimmee, FL
Thu Apr 10, 2008
Hello Evelyn,

It really depends on your situation.
I already see many changes in the market in my area. Things are on the upswing, slowly but homes are being sold.
If you have found a good mortgage, lock it in.
The mortgage rates are low and who knows what changes tomorrow will bring.
0 votes
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