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Is it Time to Buy a House?

This article was written by in Best Of, Featured, Real Estate and Home. 66 comments.


If you ask a Realtor or a national association of individuals within that profession whether now is the perfect time to buy a house, they would say yes. Of course, their answer was yes a year ago, when average prices were low, and their answer was yes a few years ago, when average prices were at all-time highs. Real estate agents are supposed to be the experts when it comes to the housing market, but they are biased. Whether buying or selling, agents make money as long as the industry is moving.

But I’ve been watching the real estate industry for the past few years. I haven’t zeroed in on a particular location yet, so I’ve been watching the national averages. Money Magazine is saying that now is a great time to buy a house, and they were able to pull off the article without any quotations from real estate agents. If, of course, you can qualify for the mortgage, and you still shop around for a deal, buying a house now might be a good choice.

Notice that I didn’t say that it would be a good investment. There is more than a good chance that the price of your house won’t move up much over the next thirty years. The short boom that we saw in the real estate market might be over, not to return for fifty years or even a century, if ever. Consider the expenses that you pour into owning a home, and you might not even come out with a profit when you sell.

It shouldn’t be the pseudo-investment aspects of owning a house that interests a buyer, it should be the ability to customize your living space and tailor it to what you and your family would like. That’s the primary benefit of ownership, but even that isn’t necessary for many people. Continuing to rent is always a valid option, skipping time-consuming maintenance needs and up-keep expenses, but having the possibility of increasing rent and the the need to rely on a landlord to take care of problems.

Would you buy a home today?

Updated January 3, 2011 and originally published December 14, 2010. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 66 comments… read them below or add one }

avatar ctreit

I am a happy home owner but I am not a real estate investor. No need for me to buy another home.

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avatar Veritroth

Absolutely not. According to the Case-Shiller index, housing is double dipping and headed lower. While prices may be low, they are certainly not at all-time lows, and there is a high probability of continuing price declines for 2011. Additionally, as you mentioned, we can expect a period of time where, once housing has bottomed, prices remain flat for years. So even if one misses the absolute bottom, you can be relatively certain that you won’t miss out on a the recovery as it will be a long and slow process. Once a bubble has popped, it’s almost never re-inflated, and it’s going to be a long, long time before we see housing prices make substantial gains.

Compounding these prices declines is the uncertainty of mortgage interest rates. Given that they are at all-time lows, they have nowhere to go but up. And when they go up, housing prices go down. This is a *fundamental* fact that every real estate agent will lie to your face about. Interest rates are inversely correlated to prices, so, all other things equal, it’s absolutely foolish to buy when interest rates are low. The correct move is to buy when interest rates are high and borrowing is expensive as less people will be in the market for a house, and those with cash will be rewarded. Additionally, when rates are high and prices are low, you have the advantage of capital appreciation, not to mention it’s a good motivator to pay our your mortgage when you have double digit rates.

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avatar Juggler314

I bought a house 6 months ago. I had been thinking about it for a while…and finally took the plunge. I recognize though that I may be more “trapped” than I would be had I continued to wait. But at some point if you want to own your own residence (I was really getting tired of not being able to build a bar, brew beer, put in a pool table, etc etc etc in an apartment) you have to take the plunge. If you are planning on living somewhere long term and buy within your means, this is a good time to buy I think – or at least sometime soon. Mortgage rates will only get so low, it’s not like you’ll ever get a 30 year fixed at 1% – low 4′s is probably as good as it will ever get (although there are some ways to get lower rates – a friend of mine recently started working for BAML and his 30 year rate was in the mid 3′s due to a job perk – bastard…). As far as prices…who knows – but if your plan is long term ownership who cares if they stay flat, or dip a bit more.

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avatar Will @ HackingTheBank.com ♦258 (Nickel)

If I had a sizable (20%) downpayment and I was certain I’d remain in my current location for at least 5 years, I would without a doubt buy a home now. Prices are good compared with historical prices. I’m not saying housing won’t go doing again, I just understand the uncertainty that surrounds house prices at the moment and am simply just dealing with the current facts compared with historical events. If I plan on living in the home, I’m not worried about the short term values.

I’d go for a 30yr fixed mortgage and pay additional amounts equivalent of a 10 year mortgage. At a minimum, even if the house value remains constant over the next 20 or 30 years, I’d at least have a paid-off home, which would mean that I don’t have the monthly expense of rent or a mortgage.

This is all theoretical, since I’m not in that financial position at all. That looks like it will be my hand of cards in approx. 10 years.

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avatar Investor Junkie

It really is based upon location. Some areas of the country it may make sense with the low rates.

For me in the Long Island area I do not plan on buying another investment property. Prices are still too high.

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avatar Veritroth

I don’t know why I try to convince others that now is not the time to buy a house. Please go buy a house. The more people buy now, the less they buy later and the better deal I’ll get in a few years. :P

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avatar Apex

How dare we not all bow to your divine wisdom.

I have bought 9 houses in the last 2 years. They are all rented out and they are cash flowing like crazy. I am making quite large returns on the money that I put in. Far more than the stock market is or has returned. And best of all, it’s a repeatable money machine. It will just keep doing it year after year, baring a collapse in rental rates (rates are going up as more people are renting and as the economy recovers the demand will start to drive them even higher).

Even if the houses don’t go up in value or go down in value it’s irrelevant. I am paying down principle and making returns on investment that exceed anything I have every gotten in the past in any other investments on a long term average basis. Eventually I will own the houses outright and have gotten amazing returns on the cash put in while doing it.

However, concerning appreciation, The houses I bought are townhouses and have already had exact same houses just 1 door down sell in a non-foreclosure situation for 25K more than I paid.

So pardon me if I choose not to follow your narcissistic spouting of investment wisdom. Some people can find opportunities even if many are too blind to see them. That’s what makes them an opportunity.

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avatar Veritroth

Thanks for the response Apex. I’m glad you put me in my place, especially considering that you completely misread the tone of my post. But don’t let that stop you from jumping to conclusions.

Better yet, go ahead and talk about something completely different (rental vs. primary residence) while bragging about your nine houses (zomg you must be so smart and rich) and then have the gall to call me a narcissist.

I would love to hear a response about my assertion that, all things equal, it’s a bad idea to buy when interest rates are low. Until then, thanks for the irrelevant comments dear Apex of Hyprocrisy.

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avatar Veritroth

*Hypocrisy

See, I was so angry I made a typo!

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avatar Apex

“especially considering that you completely misread the tone of my post.”

“I don’t know why I try to convince others that now is not the time to buy a house. Please go buy a house.”

Daring people to deviate from your advice … yes I am quite sure I am the only one who finds that pompous.

“would love to hear a response about my assertion that, all things equal, it’s a bad idea to buy when interest rates are low.”

That’s a valid point with respect to rates going higher having a negative impact on prices and from a pure investment standpoint that is something to consider. However as to your point about primary residence versus investment, that’s why that comment is much more relevant to my situation than to a owner occupant buyer. People who buy for investments and are looking for appreciation have some problems due to interest rates. But owner occupants don’t buy for investment. They buy based on one single item alone. And in modern America they buy based on the same thing they buy everything else, including cars, furniture, etc. Namely, what is the payment. I happen to think thats a terrible way to run your finances but thats what everyone does. And they do this because they don’t have any extra money. Everything is bought on credit. If you were buying with cash then your statement might be correct. However there are probably 1 in 50 new home buyers (not investors) who are cash buyers. Vast majorities of buyers are paying PMI meaning they have less than 20% cash in. That means for them the most important thing is what is the payment going to be. After that, what happens to interest rates and prices is not important unless you need to move. The key question is really if you expect to be staying put for many years. But it’s always poor advice to buy if you are going to be moving in a few years.

If interest rates double and housing prices drop in half, the payment a buyer would make on a new house would be identical. However if interest rates double prices won’t drop in half. We have had interest rates of 8-9% before and houses were no where near half of what they are now. So as interest rates go up even in a falling house price market, the cost of buying that house for the vast majority of buyers will go up.

The cost of buying a house is not it’s price. It’s the total cost of the payments it takes to own it. Interest is a very real cost, in fact for anyone who takes out a 30 year mortgage, the interest cost vastly exceeds the purchase price of the house.

If you have the ability to save up enough to buy a house with cash then your argument is valid. That’s almost no one. If they are not paying a mortgage then they are paying rent and they are still not saving anymore to buy a house and certainly not outright.

If you are taking out a 30 year mortgage and intend to stay put for a decade or more, this is probably the best time to buy a house in the last 40 years. Well actually, 1 month ago probably was. Interest rates have already climbed almost 3/4 of a percent in the last month. Cheap interest and a reasonable priced house is far better than high interest and a cheaply priced house.

If interest rates were to go to 8% in the next 5 years. I will be happy to bet that the payments on a typical house will be much higher than buying that house today. The house price may be cheaper at that 8% interest (but if the economy recovers it may not, it’s an unknown). But the interest costs will be much higher. This may not be the absolute low in terms of cheapest payment, but as interest rates get higher, the cost of the payment will get higher, not lower.

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avatar Juggler314

just to be nitpicky, in today’s rate environment (even with the 3/4% recent increase) you are actually only paying about the same in interest as the house costs, anyone lucky enough to score the lowest 30 year rates (4.25%ish) would be paying 77% of the purchase price in interest over those 30 years. 5.3% is about the breakeven.

and I agree, with the rise (even after the crash) in home prices, pretty much no one is buying all cash – it’s just too much money for all but the already wealthy.

avatar Apex

very good point juggler.

That’s to the point of what I was saying. When interest is cheap the total amount you pay is a lot less. As interest goes up, prices have to drop a lot to make up for the extra amount you pay in interest.

avatar Juggler314

Well…yeah – but i don’t think that’s the way it really works. When I was looking for my home I had a price range in mind – I was going to spend in that range regardless of what it bought – so you’ll end up with a smaller house for the same payment, but it wont depress the market in direct relation to the lessened buying power (as was remarked above). It’s not like house prices align themselves with interest rates so you always get the same square footage for your inflation adjusted payment, people just live with less house when their money does not go as far.

avatar Edward - Entry Level Dilemma

Juggler, I’m not quite sure I buy the argument that people would only settle for smaller homes if they couldn’t afford a larger space. Sure, when I buy, I’m going to be looking in a certain range, but even if my budget was unlimited, it wouldn’t change the other criterion I have for buying: 2-3 bredrooms, 1-2 bedrooms, off-street parking, no HOA, yard-space with clear southern exposure, broadband access, and cell coverage. And likes of .5+ acres, woodstove, gas cooktop, and garage.

avatar Juggler314

I think it goes the other way – people with unlimited budgets want what they want and will spend more on tricking a property out, -but yeah if you want 3 BR’s etc you’ll stick to that, you might just also have an indoor pool and game room, theater etc with an unlimited budget. But on the limited side – say you’ve got a young couple, wife is pregnant, buying a home. Assuming they are interested in buying a home and making it their home…these people are not going to wait years for the “right” buying opportunity, they are going to buy whatever is closest to what they want and compromise where they have to. Many people’s decision to buy is based on things other than interest rates and market conditions – you buy when it’s right for *you* to buy (assuming it’s a home and not an investment). So if interest rates are higher at the time and your budget is limited, you’ll still get the house, just it’ll be smaller, or maybe older, or maybe less updated…

avatar Apex

@Juggler,

I am not sure if you are disagreeing with me or not but I agree with everything you are saying.

People buy on payment. They have an idea of what they want but if interests rates go up such that the payment for what they want would be too high then they have to compromise and give up something else, less space, less upgraded, less desirable location, etc. And in so doing they have gotten less for their money so in effect what they bought just got more expensive.

Which is back to the original point that cheap interest rates and a reasonable price is about as optimal environment to get what you want as there will ever likely be.

The argument that high interest rates gets you the best deal is only true if you pay cash. Otherwise cheap interest rates gets you the best deal. Higher interest rates might decrease prices some but overall payment will go up and people will get less house for the money if they wait for interest to go up to 7-8%.

avatar Juggler314

yeah, I think we’re in agreement there. I mean I just did exactly that I bought what i could afford (ok…maybe slightly more). I had intended to stay at a somewhat lower price point (about 10-15% less). But I walked into a house that I thought was just about perfect, and was above my max, negotiated it down into just inside my max:) It’s more debt than I was planning on, but it’s manageable, I’m happy with the purchase. Thing is even had I stayed at the low end…it wouldn’t have made that much difference – another $400/month back into my pocket isn’t going to make or break me.

Unless you are purposely frugal, most people will buy whatever they can afford…I mean you’d hope you would at least have your salary keep up with inflation – in which case your mortgage payment is only going to continue to look relatively smaller…

avatar Investor Junkie

Apex,

I’m curious, where in the country are your properties located? For my area the #’s aren’t making sense.

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avatar Apex

Twin cities suburbs of Minnesota.

It works because I can find foreclosed townhouses in good communities that rent to high quality tenants at good rental rates and the interest rates are cheap.

I also know of people going into areas of Minneapolis and buying very cheap foreclosed houses for like 30K and fixing them up and renting them out for nice rates as well. I am not comfortable with that arrangement because of the quality of tenant but it works there as well.

As an example of what I am doing I am buying properties for 130K, putting little to nothing in (maybe paint and carpet) and renting them out for $1400 per month. They are 4 bedroom, 4 bath, 2 car garage, 1800 square feet. Very nice units that rent easily. I have never had one sit empty for even 2 weeks.

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avatar TakeitEZ ♦549 (Dime)

I wish I could get a 4 bed, 4 bath, 2 car garage unit for $1400 in my area (Northern Jersey/Greater NYC). $1400 will get u maybe half of that…lol. Good for the people in your area.

avatar jim

$130k for a unit that rents easily for $1400 is a good deal.

Around here I can get a semi-fixer foreclosure for $130k but it would cost more to renovate and would only rent for say $1000 to $1200 range. Not too bad considering our real estate market is pretty good but the cash flow is not as appealing.

avatar Apex

@Jim,

Certainly not all units are available for that. It takes looking for the right deals, but with careful attention to the cash flow details, the Twin Cities area does have a good supply of properties that will provide good cash flow. I would never buy them if they didn’t cash flow well. I don’t buy for appreciation so if the numbers were different I would not be buying.

avatar Edward - Entry Level Dilemma

My wife and I are just coming around the corner of our own personal double-dip recession By the time our lease expires in 2012, we should have a minimum of $15,000 saved up for a down payment on a house. We are definitely buying a home (and not one part of an HOA or covenant) then.

But I disagree that prices are at historical lows. In inflation-adjusted prices, new homes still cost nearly double of what they did when my grandparents bought their first home in 1963. (in 2009 $, the median price was ~$125,000)
In inflation-adjusted dollars median new home prices are now at comparable levels to 1999. (and that’s mostly because a huge drop reported census data for 10/2010, using the Sept numbers, we are at 2002/2003 prices, and in real prices, we are merely at 2004 levels)

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avatar Juggler314

if you are going to adjust things over time you have to adjust all your variables – the average home size for the times you are talking about has also almost doubled…so the median price doubling (inflation adjusted) makes sense…that means it’s about right in line – you really need to calculate these values on a per square foot basis.

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avatar Edward - Entry Level Dilemma

There is that, although that one of the reasons home sizes have increased is because builders realized that larger homes can be built at a lower cost per square foot. Do you have data about average home sizes for the past decade? I’d like to compare current home sizes to those in 1999-2004 since those are the price levels we are currently at.

In the end, I really wish I could find historical prices broken down by geographic region. I’d like to break the numbers down for my current area (Ft. Collins-Loveland, CO metro area) and my hometown area (Burlington County, NJ)

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avatar Juggler314

Google isn’t yielding so much, the best i could find is this: http://www.npr.org/templates/story/story.php?storyId=5525283

the national association of home builders is the source for the data on that graphic, but I couldn’t find anything more granular on their website…

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avatar brianahasmoney ♦367 (Nickel)

We’re actually looking to buy a home, since interest rates and prices are low. We want to be sure we get something we can afford, and doesn’t need a lot of work. Within a certain area, this may be a lot to ask for, but we’re determined.

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avatar Jenna

I would. I’m currently house hunting though…

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avatar Candide

Looking at the national trends for real estate is completely meaningless. You have to look at the local market and the local situation. The housing market is in the complete toilet in most of Nevada, Florida and other Sun Belt areas, but is relatively sound in areas like the affluent suburbs of New York, much of Washington, and Chicago. And within every area, different strata are at different places: what’s true for the cheap market (<$300k) may not be true for the mid-range market ($300k-$600k) and probably has no bearing on more expensive houses.

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avatar retirebyforty

I want to buy a 4-plex next year. I’m convinced that’s the way to go, if the bank will lend me money. I’ll have to liquidate most of my investments to get 20-30% down payment though.

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avatar Clay Ivy

I’m with you on the 4-plex. I’m looking for the same thing in Phoenix.

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avatar jim

I think it is a good time to buy at least in my local market. Interest rates are ridiculously low. Housing costs are either at the bottom or close to it. But I live in a fairly strong market. We grew 10% a year for 5 years during the boom. Since the peak my homes value is down 25%.

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avatar gagypsychick ♦145 (Cent)

I think that housing value is down nationwide…

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avatar Louis

Any opinions about Fannie Mae homepath mortgages? I found two houses that I really like and I have more than the minimum to put down. It just seems too good to be true. :(

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avatar Michael Vrlaku

Louis, if you need help with homepath or any other programs that might be available in your area please let me know. I am already deeply involved in this discussion and the least I can do is offer more than my opinion.

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avatar Clay Ivy

Homepath is great! You can get a house for as little as 3% down, and the best part is that you don’t have to pay private mortgage insurance. Also, if the property needs some work, you can get the renovation costs included in the mortgage.

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avatar MR ♦295 (Nickel)

Yes, I would!

With the interest rates so low and the deals that can be had, it’s seems like a perfect buyer’s market to me.

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avatar DoNotWait

It is of course a better idea to buy now than it was a couple of years ago when the prices were so high! Will it be even better in a couple of years? Hard to really know. Why? I live in Canada, in Quebec to be more precised, and here the prices did not go down that much and even went a little bit back up in most areas. Different countries, different thing you might say… Well, maybe yes and maybe no! To me, numbers might be different, but the economy tends to be better in most countries, so is US. So the house market has a chance to gain stability, maybe not tomorrow, but still not in 30 years either. If it’s the case, then now would be a good time to buy.

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avatar Michael Vrlaku

A lot of interesting comments on here and I figured I would throw myself into the discussion. In my opinion in most areas of the country the prices have stabilized. Unless you are buying simply for investment reasons, it is always a good idea to buy a home rather than renting, that is if you can afford it. Seems like many of you have some questions as to what lenders are willing to do and what you would qualify for. Please feel free to contact me and I will do my best to help.

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avatar Luke Landes ♦127,373 (Platinum)

Heartily disagree that it is always better to buy than tent if you can afford it, and many financial experts agree with me. I guess since you’re a mortgage broker, you’re always in sell mode. No wonder so many homeowners ended up in financial trouble; they trusted mortgage brokers (salespeople) for financial advice.

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avatar Michael Vrlaku

Flexo that is a cheap shot! I am not a broker, I work at the Bank, much different. and don’t understand why you would state “no wonder so many homeowners ended up in financial trouble,” when I clearly stated if you can afford it. Maybe I should have been more specific and said, if you could afford it by todays standards and not the past “broker” standards of if you have a job and a pulse you can do it. Please don’t put in me in that category as I actually enjoy helping people!

Again, if you can truly afford owning your own home and have the desire to do it, than it is ALWAYS a good idea.

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avatar Apex

I agree with Flexo, It is not always a good time to buy. For some people it is never a good time to buy even if they can afford it. So Michael, was it a good time to buy in 2005? What about in 2007? What do you base your blanket statement on that it is always a good time to buy. There are times and places where rent is cheaper than buying (2005, 2006, 2007). The argument that you are throwing money away while renting doesn’t work because when you buy your payment for the first 5-10 years is almost 100% interest, that’s not gaining you any money, thats throwing your money away. Insurance, property taxes, maintenance …. throwing your money away. Buying a house is a complicated issue. And you will notice above that I think now is a good time to buy. But when people come out and say its always a good time to buy, well that’s a mind set that needs to be exposed for the lie it is. I don’t know if you truly believe it or are pumping your game like NAR does. That’s not a shot, I truly don’t know. But it doesn’t matter. Your statement is blatently and obviously false unless you can make an argument for why someone buying a house in 2007 was a good time to buy (and if you try you are likely to make yourself look silly cause a very large number of the people who did so in 2007 are going through forclosure or stopped making payments and very close to 100% have large negative equity, so make sure to address that if you try to defend 2007 being a good time to buy a home).

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avatar Luke Landes ♦127,373 (Platinum)

Working for a bank or mortgage broker, doesn’t really matter as your livelihood is based on your company’s ability to sell mortgages and loans (not take in deposits). It may be a good time now, but to say it’s always a good time to buy, without any consideration given to running the numbers, is an irresponsible lie.

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avatar jim

Michael, you have to realize your view will come across as bias if you work for a bank that makes mortgage loans and you offer to help answer questions on qualifying for loans. You did sound like a salesperson pitching your companies services.

I think buying a home is often better but not “always”.

People who do not plan to live in their home for long should not buy a house. You usually need to live in a house for a few years minimum for it to make sense financially.
If you live in a very expensive market then buying houses makes less sense. I would probably never buy in San Francsico unless I was a mult-millionaire.

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avatar Michael Vrlaku

Jim, I hear what you are saying and I probably should have seperated my services and personal opinion.

But my personal opinion seems to differ from yours, at least a little. In a market that’s seeing prices continually decline, I would say buy carefully and make sure you plan on being there for sometime to allow the market to recooperate. In todays market with homes in most areas I am seeing, staying steady and rising, I say its a good time. As for San Fran and other expensive markets, they generally hold value better than other markets, where you can buy and live for a couples years and sell it again. often times the person who does this would probably have rented something expensive and also would have benefited from the mortgage interest write off. In this case it could save money to own rather than rent.

I think some people are only looking at what values are, but if the buyer plans to live there for sometime, then the immediate future values should not be the main concern.

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avatar jim

Michael, I don’t think we disagree really. Except I’m not as convinced about San Fran being a good market, but thats a matter of opinion. When you originally said its “ALWAYS” a good time to buy that left out details like the assumption that the family would stay there for a while and the assumption that its not one of the truly BAD real estate markets.

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avatar Michael Vrlaku

Apex and Flexo, what did I get myself into? lol, I guess I deserve this responses with my short statements and lack of explanation. Apex, I purchased in April 2007 and I know exactly how the public feels. I did not purchase to flip and make a profit, I purchased because it is the american dream. I purchased because I had a little boy that was running into walls in my 2 bedroom apartment, I purchased because I had a 1000 sterio system that I couldn’t put up loud because I had someone living above me. Purchasing a home is not always about the money, that is what I meant by the desire to purchase. Was I a little shocked that my value is still lower than my purchase price, yes. But overall am I happy that I purchased, yes! My family is better off and I love my home.

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avatar Michael Vrlaku

Flexo, you reference “No wonder so many homeowners ended up in financial trouble; they trusted mortgage brokers (salespeople) for financial advice.” Which is actually has some truth to it, but I do not feel I belong to this category. And to say that my opinion is a irresponsible lie is ridiculous.

anyway lets put this past us. I understand your points and they are valid, but my position has nothing to do with financial advice, and therefore we have no reason to disagree.

Again, anybody needing honest help let me know.

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avatar Sandy @ yesiamcheap

Is now the time to buy? It’s a better time to buy than a year ago. There are some indications that housing prices may not have bottomed in many areas of the country and may do so after the moratorium on foreclosures is fully lifted (B of A will begin foreclosures again after the holidays) and courts are satisfied with the legal processes of foreclosed homes. When that wave of houses hits the market some areas will be prime locations to buy. With that said, I live in NYC and prices have not really fallen. Rent had dropped a little about 7 months ago but are back on the rise. With that said, if I had cash on hand I would buy another investment property tomorrow.

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avatar LifeAndMyFinances

My wife and I will be looking at purchasing a home soon. We would really love to get out of debt first, then build up our emergency fund, and then save up a downpayment, so we might not be ready until the end of 2011, or the beginning of 2012. I am still watching the market though. The experts predict that the value of housing will continue to decrease into June or 2011, so I think my wife and I are right on track.

Even if the market starts coming back, it will be crawling, so I’m not that worried about it. For now, we’re just excited about paying off those debts!

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avatar Barb Friedberg

Yes, yes, yes… houses are on sale now. If you think you will want to buy sometime, NOW is an excellent time. Prices are lowish and interst rates are the lowest they’ve been in a generation.

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avatar gagypsychick ♦145 (Cent)

Yeppers! Buy now while interest rates are low….with all the money printing – interest rates are going to have to increase in the near future.

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avatar Clay Ivy

I started buying real estate when I was in college, and I have only used a Realtor once. Typically, I am willing to do more research than they are. Don’t depend on someone else to decide on your investments or home purchases. If you do need a Realtor, find one who invests in real estate. They are often much more knowledgeable about the market. They will also help you figure out if the numbers work.

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avatar gagypsychick ♦145 (Cent)

Completely agree with you about doing your own research! No one has as much interest in your money as you do.

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avatar Lamont

In my opinion, due to low home prices and low interest rates… it’s a great time to buy as long as you can put at least 20 percent down and avoid mortgage insurance. About a year and half ago I purchased short sale five bedroom home with a fixed 30 yr mortgage and my payments are less than it would be to rent a one bedroom apartment here. Then you factor in the Mortgage tax deduction and compare that to paying rent for all those years with no return on investment… its a no brain-er even considering taxes and maintenance…. because you can be sure that those expenses or factored into rent as well.

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avatar tigernicole86 ♦55 (Newbie)

Honestly, it depends what part of the country. Where my boyfriend lives, a house actually came onto the market after his neighbor died for rather cheap(basically, we could sell the house with little effort and almost no improvements) for double what we paid for it. It’s in a decent section of the city, a 10 minute drive away from downtown, and after we move out of it(once I move up there of course), we’ll be renting it out. Happiness. :)

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avatar gagypsychick ♦145 (Cent)

You lucked out! Definitely an interesting story to tell how you “found” the house.

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avatar faithfueledbennetts ♦264 (Nickel)

If I had the money, I would buy a house now. I wouldn’t buy for the investment, but for the happiness of my family. I think as long as you are wise about your decisions, even if you do not make a profit in selling, if you enjoyed the home while living in it than it was worth it.

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avatar emizar ♦329 (Nickel)

If you had asked me 4 or 5 years ago, I would have told you that I expected to own a house in 2011. My first years working full-time were during the era of easy credit. However, I realize now that I would prefer (and probably need, for loan qualification) to have a large down payment, in addition to a solid emergency fund, before buying. I would love to buy now, but without feeling highly prepared I don’t know if I could really enjoy it.

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avatar 4hendricks ♦248 (Cent)

We have 2 homes that we use, and 4 investment properties that are tanking. I do wish we had the funds to buy a bigger house – however, we are also thankful that we can keep the 2 roofs that we do have over our head.

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avatar shellye ♦107 (Cent)

Good discussion – I am actively looking for a new home to buy, as I am remarrying soon and we need a larger house to fit all the kids, pets, etc. Fortunately, we have great credit and can get a good rate on a 15 yr fixed loan. We’ll be keeping one of our houses to rent out, but if we have problems getting a renter, we’ll put it on the market to sell.

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avatar wylerassociate ♦906 (Dime)

do most people use the same bank for their mortgage as their personal checking/savings account?

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avatar Bob Babcock

If I had the money, I’d actually buy multi-unit residential properties besides owning a home. Not only are the tenants paying all the expenses (when properly managed), but the depreciation can save me thousands in income taxes.

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avatar 4hendricks ♦248 (Cent)

We have a lot invested in Real Estate – that being said, I would buy more especially rental units. We may downsize into a duplex and rent out our main home.

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avatar 4hendricks ♦248 (Cent)

We also have a second home that we may start renting out – and buy smaller one to use.

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avatar dawgette ♦199 (Cent)

It is a good time to purchase a home because of the depressed market.

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