Comments on: Deep In A Buyer’s Market: Time To Buy A House

By: DawnChicago

DawnChicago — Sun, 21 Jun 2009 14:07:10 +0000

RhodesianRiodgebackinAZ – thanks for the post. This was a very useful article. Can you let me know if this information is updated regularly and where I might obtain additional information? Thanks so much!

By: vh

vh — Sun, 16 Dec 2007 15:17:48 +0000

Housing prices aren’t just regional; they’re local. In the Phoenix area, prices in the few remaining middle-class central areas are holding pretty well. In the outlying suburbs, though, foreclosure rates are soaring and prices are tanking commensurately. If you don’t mind an endless commute through gawdawful traffic, this is probably a good time to buy a house located halfway to Yuma.

We now have a plenty of those, after several years of bulldozing the spectacular and irreplaceable Sonoran desert at the rate of an acre an hour. The newer developments consist of poorly built, ugly elbow-to-elbow cookie-cutter styrofoam-and-mud houses of varying sizes and degrees of grandiosity. I’m not sure I’d bet the farm on stupid urban planning and greed-based construction.

On the other hand, in the timeless American tradition, the middle-class infrastructure has followed white flight, and it IS a pain in the tuchus to have to drive to Scottsdale or the far west valley to buy clothing at anyplace other than Old Navy or WalMart. And if you have kids, private schools here are now so expensive you maybe forced to live on the outskirts to get the young people into safe schools that are more or less academically adequate.

But as Nick points out, even with prices “down” the cost of a house is so exorbitant that, unless you can cover most of it in cash and keep your interest & principal payments to $800 a month or less, you may be better off renting.

By: Nick

Nick — Sun, 16 Dec 2007 02:16:11 +0000

As Matt Wolfe pointed out, here is a major reason to believe that housing prices will continue to fall: they are completely unaffordable. In Los Angeles a crappy condo conversion (complete with $200-$300 association fee) goes in the $300k-$400k range.

Assuming I can save up 20% of that high price for a down payment, my monthly payment including taxes and association fee is in the $2000-$2200 range… and that is for a crappy one bedroom condo conversion! Forget about ever living in a house anywhere closer than Palmdale. You might get by with 10% cheaper if you are willing to live in a gang neighborhood.

Consequentially, anyone who is not already in the market with equity is priced out of the market. Prices have to come down so that even an average family can afford to move into a small home without having to devote every spare dollar and more only to put a roof over their heads.

By: Lazy Man

Lazy Man — Thu, 13 Dec 2007 05:22:21 +0000

They say that you shouldn’t try to catch a falling knife. However, I think this is great dip. Seasonally, now is good timing as well. I think the prices will stay low for the next 18 months though. After all, that’s where all the resetting mortgages talk is coming from – not the problems now, but the problems in the future. I don’t know if prices will go down more though. I just expect that they stay stagnant during the next 18 months before getting better.

By: Tom

Tom — Wed, 12 Dec 2007 23:20:08 +0000

Here in Michigan, the housing market has taken a little tumble. With the big 3 cutting jobs and having one of the worst economies, I jumped in and bought a condo I couldn’t pass up. I was able to buy a brand spanking new condo just under 100k in a very nice neighborhood. Keep in mind that this place appraised for 145k. I thought I got a great deal.

By: Ray Lora

Ray Lora — Wed, 12 Dec 2007 16:00:19 +0000

There is no doubt that things have changed lately. Yet, there is a solution to that... marketing or advertising. Before, buyers are the one chasing. Now, sellers should be the one to do the chasing. With the advent of technology, it's really easy to reach the market, especially with the low cost it provides. All you have to do is to prevail among everyone else. You need to be equipped with the right marketing tools. Here is an example that could help you with your issue, cellmyhouse.org

By: mbhunter

mbhunter — Wed, 12 Dec 2007 15:54:48 +0000

People who bought recently and are now trying to sell may have trouble selling, I agree. Even if they take the house off of the market, it may not change their need to sell.

If this looks like a buyers’ market now, it’s only because prices have been so ridiculous that any drop seems like a bargain. The same way that $2.40 gas seems like a bargain.

I think we’re getting close to the point at which a lot of sellers will give up hope of selling, but we’re not quite there yet. I see lots of “For Rent” signs, owner financing, sell OR lease OR anything that will stop the financial hemorrhaging. There are plenty of happy-faced Realtors who really know how to sell. But when the buyers stop showing up because they can’t qualify anymore, then those smiles wear thin and the carnage ensues.

The bailout will postpone this in some areas, but investor-held property will join the fire sale soon.

Banks won’t let houses languish. They’re not in the property management business. They’ll sell at some price.

Worry not. The bargains have just begun!

By: J.D.

J.D. — Wed, 12 Dec 2007 07:27:14 +0000

Here in Portland, prices are only now beginning to flatten. There’s some speculation that we won’t even see them fall!

By: Lord

Lord — Tue, 11 Dec 2007 07:52:32 +0000

Things should worsen for at least the next few years. One can buy with the long term in mind or wait, but not if you have to sell first. I would not even look to buy before selling, and there isn’t much likelihood of that occuring with financing nonexistant.

By: bryan

bryan — Tue, 11 Dec 2007 07:14:34 +0000

i too believe things will get worse. i would only be buying properties for the sole intention of renting them at a positive cash flow. if the numbers work and the opportunity is there, buy it. rent prices will only be increasing.even if home value goes down, you are still making at least the same money you originally calculated.

as for buying a personal residence, wait 2-3 years. interest rates should remain relatively low

By: RhodesianRidgebackinAZ

RhodesianRidgebackinAZ — Tue, 11 Dec 2007 04:39:05 +0000

For God’s sake…don’t buy a house now. Things are going to get significantly worse.

For the most detailed, intelligent analysis and discussion on the financial markets specific to housing (basically a free master’s level college class in economics) go to http://calculatedrisk.blogspot.com/

By: Dave

Dave — Tue, 11 Dec 2007 00:34:53 +0000

I am from Central NJ and prices on almost all homes have fallen about 10% over the past year-year and a half. What I see now is that people who are ready to retire (or are almost there) are willing to relocate early and take any equity gains (profits!!) with them which is resulting in a surplus of homes for sale. Some towns which were traditionally “expensive” to live in with good school systems have a ton of houses for sale because everyone’s trying to get out while the getting’s good. As a 28 year old condo owner, buying a single family home now is best for me, because I’m still at the “entry level” price wise, and the value of my condo hasn’t dipped all that much, but single family homes have dropped anywhere from $25-50k. I will be putting my condo on the market in January to try and capture some of the price correction on single family homes before the value of my condo drops. Overall though, I think that unless you are moving to a cheaper part of the country, or making a major life change (downsizing for empty nesters, or buying a first home) the benefits or gains from moving in a hot or cold real estate market is minimal, because you will lose value in the home you are selling at a similar rate to the loss in value of the house you are buying.

By: TTFK

TTFK — Mon, 10 Dec 2007 23:57:10 +0000

I paid $104,000 for my little 1179ft/sq abode in 2003.

According to Zillow, it is now worth around $133,000.

It is all moot, since I have no plans to move for the next 15-20 years anyways.

By: Minimum Wage

Minimum Wage — Mon, 10 Dec 2007 22:46:40 +0000

Homes that have languished on the market for months will probably slide a few renters in to tread some water and those foreclosures?
—————————————————————

Danger! Will Robinson!

Check your zoning before trying this at home.

I’ve seen places where it’s illegal to rent to more than two unrelated individuals. You can stick an unmarried couple or a family of eight in these homes, but you can’t slide in three unrelated.

By: Miller

Miller — Mon, 10 Dec 2007 21:41:38 +0000

I agree with the comments above that you can just never tell beforehand. Recall the next few months are the peak of the subprime resets. We’d think that’d have *some* impact. But who really knows, right? Here’s the only think we can say for certain: it would be better to buy now than a year ago.