Buy now (in montgomery county) or a year from now?

Asked by jmb, Gaithersburg, MD Wed Mar 5, 2008

I have the option to rent for a year and let the market settle down, or buy this summer. Which one would be the better option?

On another note I see zillow's "zindex" to be flat for the affluent downcounty areas and declining for the nicer suburbs further north. Is this consistent with what you see? If yes, do you think that the Bethesda/Potomac prices will hold steady or decline?

Help the community by answering this question:

+ web reference
Web reference:


jmb, Home Buyer, Gaithersburg, MD
Fri Mar 7, 2008
I am sorry, I have to disagree with the answers posted so far. I have been looking at some of the gloom and doom scenarios since I first posted the question -- the reasoning behind them seems to be quite sound. Even if some one has a strong preference for the home owning benefits not offered by renting he should re-think buying.

I am afraid Low Prices + Low Rates ISNOT= Affordability right now. Affordability went out the window 4-5 years ago. I think the new equation will be

Drastic Price Cuts = Affordability

I think everyone's interest will be best served if agents were to impress upon the sellers to reduce prices dramatically so that we can get over this phase quickly and resume normal business.
4 votes
Jason Sardi,…, , 18106
Wed Apr 2, 2008

Real Estate is local and if you are finding home prices dropping in a particular area you want to buy in, you may want to take advantage of that now. As long as your ability to get financing is in good order and your credit is in good shape, the combination of home prices going down and interest rates still being low is a combo you may want to take advantage of sooner rather than later.
2 votes
Jeff, Home Buyer, 20878
Tue Jul 29, 2008
The previous comments on rates are dead wrong.

As an example, assume the average first time home buyer can afford $1500 a month in home costs. At 6%, that's a $250k mortgage. If rates rise to 10%, that payment only affords a $170k mortgage. Did this average buyer suddenly come across more money due to rising rates? No, they can still only afford $1500 a month.

The seller would have to make up the difference.
1 vote
Carolyn Thom…, Agent, Rockville, MD
Sat Jul 19, 2008
Prices are holding in many pockets, but little appreciation lately.
Web Reference:
1 vote
Hi, , Virginia
Wed Apr 2, 2008
you know the answer to the question

the trend is your friend

a year from now may still be too early


good luck
1 vote
Chris Highla…, Agent, Frederick, MD
Wed Mar 5, 2008
I hear questions from many people who are trying to time the market. While we realtors don't have a crystal ball, we are in this full time and watching the market closely. I agree with the last 2 comments, but I'm going to go out on a limb and say that even though we don't know for sure if we've hit the bottom, I think that interest rates are going to start climbing because the Fed's next worry is going to be inflation. If you wait to buy next year, and lets say the home(s) you are looking at decrease another $10,000 on average, if the interest rate rises even 1/2 %, you end up paying the same in monthly mortgage, but you spend another year living in a home you'd rather not, and also not having the tax write-off for this year. I think the risk is greater if you wait. Now is the best time in a long time. Like Reza said, low price and low rate equals affordability.
1 vote
Jonathan Lah…, Agent, Rockville, MD
Mon Sep 5, 2016
This question is a year ago.. I hope you did find answer to your needs.
0 votes
Dung, Home Buyer, 20878
Wed Aug 3, 2011
Have the house price increased since jmp posted the question and many agents had answers that it would?
0 votes
Carolyn Thom…, Agent, Rockville, MD
Mon May 16, 2011
It is our responsibility to represent our clients. Our clients don't typically hire us for altruistic purposes. They hire us to get their home sold for the most money in the shortest time possible.
0 votes
Richard Helb…, , Bethesda, MD
Fri Aug 15, 2008
Dear JMB,

Since you asked this question some 5 months ago, you've probably had it (somewhat) answered by now. My 'additions':

-- Monty Cty is a big place, even Bethesda is. Outside the Beltway is 'soft' and will stay that way, (for obvilus reasons...gas $, traffic)
-- Zips 20815, 20816 inside the Belt way are strong 'micro-markets'. Prices have been rising and in my opinion they will continue to do so.

To 'call' prices, you have to 'call' interest / mortgage rates. Rates go up, prices come down, but monthly payments rise. Bit of a trick...just ask an economist! My solution:

-- Take your time finding a house you REALLY like
-- Make as aggressive an offer as is possible, (average MC discounts to "list" are running about 8% today)
-- Get yourself into a nice-long, (still historically low interest rate)
-- Enjoy your new home!

0 votes
Pat, Home Buyer, San Ramon, CA
Sun Aug 3, 2008
I would definitely say hold for a year, if not longer. I was planning to buy in 2005 (whew, what a mess that would have been!), but held off. I have been tracking this market for a long time, and I can say for sure that they are still overpriced. I have had my eye on a few communities and the trend that I have seen is very interesting. For example, one particular community (houses built mostly by Ryland) which can be perceived as medium-upscale, and where houses sold for upto $800k during the peak, is waking up to the unpleasant truth that buyers cannot be taken for granted. Houses over there sold for $700k last year; they are now listed in the high 500s but are unable to find any buyers. Don't let that fool you into thinking that prices have reached its bottom, because even in the inflated market of 2002, these houses had sold for $350k - $400k. That should give you an idea of what kind of a bubble we were in from 2003-05. All those people who are telling you that now's the right time to buy, of course, have a vested interest in your affair. I am going to bet my last lone dollar that most of them are either starving real estate agents or desperate homeowners who have taken to the web as their last ditch effort of saving their unwise investments.
As to the shills who are shouting from the rooftops that all real estate is local (reminds me of that joke of an NAR president, David Lerah) well, guess again. Check out the Case-Shiller home price index and weep.
0 votes
Rez Kodad, Agent, Naples, FL
Mon Mar 17, 2008
Jmb, Bethesda and Potomac will hold steady and may increase. Why? because of the demand for those locations are higher!
0 votes
Rez Kodad, Agent, Naples, FL
Wed Mar 5, 2008
Dear Buyer, when is the best time to purchase a home? Did you say in the buyer’s market? Yes! No one can forecast the future market!

Well, we find out about the uptrend when we are already in to it. So, what is this mean? Montgomery Real Estate market start going up starting March 30th, peak at June/July, nose down mid July, up swing after Labor day and by end of the Oct nose down. This mean 2nd and 3rd quarter market is warmer than 1st and 4th quarter.

Recommendation- Low Price + Low Rate = Affordability, and means now is the best time to buy. Today you have more options to choose, and you have upper hand to negotiate. Next year, rates may be higher, sellers will not be as flexible, and demand may increase the price.

Last word –

Don’t wait to buy Real Estate, Buy Real Estate and wait!


Real Estate Consultant
0 votes
Search Advice
Ask our community a question
Market Conditions in Potomac Zip Codes

Email me when…

Learn more