Tumbling Prices

Asked by Captain Cautious, Roxbury, NY Fri Mar 4, 2011

Recent sales shows a home in Roxbury was bought for $239,000 in 2008 and sold for $200,000 in 2010. Should I be afraid the price will continue to drop if I buy today?

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Phil Rotondo’s answer
Phil Rotondo, Agent, Melbourne, FL
Fri Mar 4, 2011
Captain;
Armchair quarterbacking is easy; timing the market's bottom is not.
Over the long term real estate is in most cases is a great investment for the future.
Proceed and buy.
Web Reference:  http://www.321property.com
1 vote
Spirit Messi…, Agent, Tucson, AZ
Sat Mar 5, 2011
This is up to you and your tolerance for risk; it is nearly the same for any commodity. For example you ever hear the saying "You can't catch a falling knife?" in reference to stocks? I believe TIME is a big factor in investing, if you have the time and it is not only a "buyers" market but a good time for you personally to buy, you should speak with a lender to get pre-approve and find out about Investor Rates (they are higher than what you pay for your primary residence). Then talk with your CPA for tax ramifications (yes, you will pay tax if you rent it out) or capital gains if you flip in within X amount of time. Finally, I would then consult your financial consultant or talk with one if you do not currently have one to see what other ideas they have for you as an investment option.

Just a couple of ideas and options for you to explore. Best of luck.
Spirit
0 votes
Anna M Brocco, Agent, Williston Park, NY
Sat Mar 5, 2011
Unfortunately, none of us knows for sure where the market will head tomorrow or down the road, what we all know is today; therefore if you are ready to buy, need to buy, have the finances, etc., don't worry too much about resale.
0 votes
Ralph Windsc…, Agent, Hauppauge, NY
Sat Mar 5, 2011
Captain Cautious - you may turn into Captain Courageous! Whether you decide to purchase now or wait depends on several factors: are you paying rent right now? If so, that's money being thrown out the window every month from not only paying rent but losing the tax benefits of home ownership. If your plans are to stay in a house for at least 5 years, then it's probably a good idea to purchase right now almost no matter what the market does. Even if the market decline continues, in five years, you may have paid off enough of your mortgage to at the very least break even. At the end of the day, interest rates are ridiculously low and so are prices. If you find a good buy, grab it. Good luck.

Ralph Windschuh
Associate Broker
Century 21 Princeton Properties
631-467-0009
rwindschuh@c21princetonproperties.com
0 votes
Bill Eckler, Agent, Venice, FL
Fri Mar 4, 2011
Captain,

Regardless of where you decide to purchase today, buyers should be concerned. Buyers should consider doing an in dept evaluation of the recent market activity to determine the current trend.

We find that in many locations the market is "bumping along the bottom." This can mean that prices may continue to move in either direction, depending on a number of factors or their prices may be consistant with current market activity.

The bottom line is that all serious buyers should have a feel for the current market activity, where the present bottom is, as well as how their budget and plans fit the local market.

A local real estate professional will be able to support your interests.

Good luck,

Bill
0 votes
Jeanne Feeni…, Agent, Basking Ridge, NJ
Fri Mar 4, 2011
Hi Captain Cautious - love the name incidentally!! - I agree with my peers, we are far along in a correction, while it may continue to correct through this year, the combination of low rates and these prices presents the opportunity that is historically unusual. There is generally an inverse relationship between the two, to see them come together like this is not likely to last.

Good advice to buy within your comfort zone, don't stretch beyond your limits hoping for quick appreciation to cover, that is not in the forecast.

Good luck to you,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference:  http://www.feenick.com
0 votes
allan erps,A…, Agent, Pearl River, NY
Fri Mar 4, 2011
Agree with my colleague below! Interest rates are fantastic and make up for the difference in price! Affordability is key, if you are not "stretching" to buy then catching the bottom is not a concern.
0 votes
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