Should we wait to buy??

Asked by Clarisaone, Oxnard, CA Wed Jun 19, 2013

My husband thinks home prices are going to drop significantly once investors pull out of the market and put all the homes for sale He wants to wait a year to buy. Is this a good idea? Or is now a good time to buy even with low inventory? Will home values decrease?

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Lori Corken, Agent, Englewood, CO
Mon Jun 24, 2013
Investors who are buying homes today are doing so to
Hold them as rental properties;
And it is my opinion that that prices will continue to increase thru 2014.
I would suggest buying now.

Lori Corken
Broker/ Owner

Lori Corken & Company
9800 MT Pyramid Court,
Suite 400
Englewood, Co 80112

office: 303-858-8003
cell: 303-717-2498
fax: 720-222-1988
0 votes
Lori Corken, Agent, Englewood, CO
Mon Jun 24, 2013
Investors who are buying homes today are doing so to hold them as rental properties;
And it is my opinion that that prices will continue to increase thru 2104.
I would suggest buying now.

Lori Corken
0 votes
Joan Roberts, Agent, Ojai, CA
Wed Jun 19, 2013
It really depends upon your personal situation as to whether you should buy now or not. It is very difficult to precisely predict future market activity. Right now we see the prices edging upward.

If you are buying a home for yourself for the long run then right now you have ideal conditions with low prices and low interest rates. A perfect formula! If you are buying for the short term and want to sell in a few years then it is not a good time unless you get a discounted fixer and put money into it to sell later. The investors most likely will not dump their houses on the market at the same time. That would be counterproductive for them since it will drive their prices down and that's not want they want.

Call me anytime for further discussion,
Joan Roberts, Broker Associate, DRE# 00953244
Coldwell Banker Property Shoppe
0 votes
Cindy Davis, Agent, San Diego, CA
Wed Jun 19, 2013
I'm afraid that predicting the future is an effort in futility. The housing market is a reflection of many other variables.

My advice? Buy when it's the right time for you and your family. I ended up buying during the peak market in 2004....and am still in my home...loving it. It was upside down for a long time, but I stayed put and have enjoyed living where I do.

Best of luck.
0 votes
Cambria Grant, Agent, Ventura, CA
Wed Jun 19, 2013
Hi Clarisaone,

Your husband is just being cautious considering all the short sales and foreclosed properties out there. However, I would remind him that everyone who buys a home is an investor, with great benefits.

Basically, now is the time to buy while both interest rates and home prices are still on the low side. I believe it would take more than a year for the current trend to completely reverse itself, that is, high inventory and low demand. In the meantime, interest rates may jump to 5% by year's end, increasing your housing costs. Talk to your mortgage broker and ask her/him to go through different scenarios, i.e. lower prices with a higher interest rate or slightly higher price with a lower interest rate. If you don't have a mortgage broker yet, call Jane Robertson from CFC Mortgage, her number is (805) 701-5232.

Finally, keep in mind, while you are waiting for a possible drastic drop in home prices and if you are renting your current home, you are paying off someone else's investment instead of your own. It's good to be cautious, but if you find the perfect home with a reasonable price tag and your house payment is close to what you are paying in rent right now, why would you wait?

Best regards,

Cambria Grant
(805) 295-8795
Dre# 01482332
0 votes
Dena Schlutz, Agent, Boulder, CO
Wed Jun 19, 2013
As the economy recovers, interest rates will increase to cool down the high appreciation we are currently seeing. If it were me, I would lock in at today's low interest rates. Increasing interest rates usually have a negative effect on home prices so you might pay less for the house, but more for interest = kinda a wash.

The tight supply that we have and high demand is indicative of the bottom of the market. My advice to people is to try to buy when the indicators are saying bottom = now. If you want to get very technical about the decision, I would do a scenario analysis for 'what if' interest rates increase to... and prices move to... and appreciation is anticipated at .... Then you give a percentage possibility to each scenario and make an educated decision :) One of my neighborhoods appreciated 10% over last year while people were borrowing at 3%.

But don't get stuck in "analysis paralysis". If you are buying and selling in the same market, it's pretty much a non-issue. If you are first time home buyer, this is one of those special moments in history when interest rates are low and prices are recovering..... how sweeter can it get?

Dena Schlutz
Your real estate consultant
0 votes
Gary Geer, Agent, Antioch, IL
Wed Jun 19, 2013
It's true that large investor groups have been purchasing properties and this has helped support the market in some areas. I would be more concerned about intrest rates rising having an effect on the market. They are rising and most likley will continue to rise in the future. If you are a buyer needing to finance a property I would buy now if possible. The bottom line is if you find the home you want now why wait?
0 votes
Barry Shapiro, Agent, Camarillo, CA
Wed Jun 19, 2013
This is an excellent question! And, you're not alone in having these same thoughts, which are shared by other Buyers in our marketplace that is seeing 20% rates of appreciation. The best answer is: "It Depends" ... Although there are several significant external factors that affect the price trend(s) in our local real estate market, the most fundamental consideration is your family's personal short- and long-term goals. It's important to sit down with a real estate consultant earlier on, to review all your financial situation and options, so you can project where you would like to be in the future and what strategies best fit your own goals. Once you have discovered the clarity of marketplace factors which affect pricing trends, and you have defined your goals, you can move forward in your game plan with confidence and be decisive in your action. Right now may or may not be the best time to buy for YOU. Spend an hour with a trusted and knowledgeable real estate agent. You'll be glad you did :-)
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