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So, is now a good time to buy a house?

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So, is now a good time to buy a house?

Old 03-20-08, 09:56 AM
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So, is now a good time to buy a house?

Well, house prices have dropped substantially especially where I live in the LA area. Just wondering, is it a good time to buy houses now, or wait a bit, since houses are still going down?
Old 03-20-08, 10:00 AM
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with rates so low, i say yes.

sure the housing market may continue to drop, but by how much really? and if the house price goes down 50k, but your rate is 1+ point higher, does it matter?

i would rather pay a little more fro my house than more in interest.
Old 03-20-08, 10:01 AM
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Yea, what he said. You can't try to time the bottom because once the bottom hits it will bounce back up probably. It's better to make sure you get a home you like and make a good decision on the property than try to time the exact bottom of the market.

This is all assuming your planning on living there for some time and not trying to flip it or something.
Old 03-20-08, 10:08 AM
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If you got the down payment, I say go for it. The fed can't keep the interest at the current rate for too long.
Old 03-20-08, 10:10 AM
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This is going to be a guessing game, however, it mostly depends on how long you plan to own this house.

If you only want to own it for 5 years and get out, I would wait. If you plan to own it for 20, then it doesn't really matter.

MY GUESS is the economy will continue to tank for at least the next year or more, possibly going into a full blown recession, meaning I think prices in many areas will continue to fall, LA may be protected from much of that just due to the demand for housing that area.

Ben Bernanke does not appear at all interested in raising rates, but eventually he will have to (or if he gets replaced, anything can happen)

Basically, no one can answer your question
Old 03-20-08, 10:17 AM
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Originally Posted by D.Pham00
Well, house prices have dropped substantially especially where I live in the LA area. Just wondering, is it a good time to buy houses now, or wait a bit, since houses are still going down?
Do you have the money? Have you found a house that you want to buy? If you intend to live there for more than a few years, then yes this is probably a good time to buy.
Old 03-20-08, 10:48 AM
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what is the ratio of the price to rent vs the price to own?
Old 03-20-08, 11:30 AM
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Originally Posted by Brian Shannon
Do you have the money? Have you found a house that you want to buy? If you intend to live there for more than a few years, then yes this is probably a good time to buy.
yes, i have the money for a 20% downpayment and enough to pay the mortgage for houses in my price range. there is one house i really like, and others that are good too. not sure how long i'll keep the house though. right now, i'm single, and i wouldn't mind living here for a while, but things can change...
Old 03-20-08, 11:40 AM
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Originally Posted by al_bundy
what is the ratio of the price to rent vs the price to own?
right now, i live with my parents, but i don't think i can live with them forever, so that's why i'm looking for a house.

to answer your question, hard to say because if i rented, i'd rent an apartment or condo. being that i'm single, i would probably rent a 1 or 2 bedroom. and if i buy, i'm looking for a house with at least 3 bedrooms.

so, comparing the apartment to the house, the rent vs. mortgage would be about 50-75% more. i'd say comparing renting a comparable house to one i would buy, maybe 20-30% more.
Old 03-20-08, 11:58 AM
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If you have a downpayment and can get a loan, then yes.
Old 03-20-08, 11:58 AM
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Within reason, you can't make these decisions based on what MIGHT happen. You need to deal with the here or now. Sounds like your ready to get into a property. So many people get into problems with what MIGHT happen. For all we know...

- The market might continue to go down
- The market might turn around
- Terrorists could be eliminated or overtake entire countries and effect economies, jobs, housing, etc.

As long as your not buying a house to try to make some giant sum of money in one year, then go for it. If life changes, you roll with it down the road. Right now, yes it's a good time to buy if your smart about it, can afford it, and put some thought into your position in the future, but don't depend on the future occuring the precise way you think it will
Old 03-20-08, 12:02 PM
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It does seem like a good time to me, but I thought that 6 months ago too. Both may end up being a good time. Now is better than then, no telling how it will be 6 months from now. We're approaching a better season in the market (winter is always slow) so if ther will be any relief at all this year, it should be soon. I think you need to make sure you can keep it at least 5 years. That should allow time for things to at least recover if the dip continues a little and you have a good shot at some equity. But if you're looking short term you also have to figure for all the fees associated with buying and selling. It will definitely take some time for your equity to outweigh that. But that's always the case. I say the market is ripe, but I'm no expert.
Old 03-20-08, 12:07 PM
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My parents just went under contract at 37% below asking on a house in Naples, FL. Admittedly, anecdotal and skewed (Naples was ridiculously overpriced for the last few years), but there you go.
Old 03-20-08, 12:11 PM
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Do you want to buy my house?
Old 03-20-08, 12:14 PM
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Originally Posted by Thor Simpson
Do you want to buy my house?
Will the corn dogs be included or not?
Old 03-20-08, 12:29 PM
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Originally Posted by wishbon3
Will the corn dogs be included or not?
Well, we'd have to add a little to the value but you could roll it into your loan.
Old 03-20-08, 12:31 PM
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Originally Posted by Hiro11
My parents just went under contract at 37% below asking on a house in Naples, FL. Admittedly, anecdotal and skewed (Naples was ridiculously overpriced for the last few years), but there you go.
Yeah, I mean right now they are giving away houses there... My wife is from Naples and the in-laws who have been there for 40+ years always used to just laugh at the prices people are paying. We wanted to move back there, but for younger people the job market is horrible there. Bad news though, its takes your first born (hope thats not you ) to get home owner's insurance down there now.

I would say its always the right time to buy a house if you can afford it and you do your research and make a well thought out decision.
Old 03-20-08, 12:33 PM
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Who needs insurance in Florida? Seems silly.
Old 03-20-08, 12:49 PM
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Originally Posted by Thor Simpson
Do you want to buy my house?
will you include ?
Old 03-20-08, 09:10 PM
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A couple of you have referenced Bernanke and keeping rates low..FYI, that has nothing to do with the mortgage rates. Mortgage rates are tied to the 10yr note; not the discount rate.
Old 03-20-08, 10:11 PM
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Originally Posted by tbone
A couple of you have referenced Bernanke and keeping rates low..FYI, that has nothing to do with the mortgage rates. Mortgage rates are tied to the 10yr note; not the discount rate.
Mortgage rates are not tied to the 10-year Treasury Note. There's been plenty of times where there's been a significant (40 bps) difference in their change, with some days there being completely opposite changes (one goes up, the other goes down). Mortgage rates go off of mortgage backed securities, period. The problem is that those aren't commonly reported so you have to use the T-note as a short of somewhat accurate shorthand.

Bernake lowering the rates will only benefit mortgage rates if there's a feeling that inflation is not a problem. Lowering the funds rate makes inflation go up. Higher inflation = higher mortgage rates. (This isn't true 100% of the time, but it's a valid counterargument as to why they don't directly correlate).
Old 03-20-08, 10:38 PM
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I've said this so many times here over the past year and a half I'm beginning to sound like a broken record... we won't see the bottom of the housing market (especially in the L.A. area), for at least another two years. So, if you feel comfortable buying into a loss I say go for it, but if you want a better deal, patience is a virtue. If you can wait, you'll be rewarded with a better deal. This I can guarantee... how you ask? One last time (or until the next person asks the same question again). Plain and simple... People don't earn enough to be able to afford the average priced house in Los Angeles... period!


If you still feel the need to purchase right now then ask yourself these simple questions:

1. Do you earn over $250k a year?
2. Can you afford a $4,000 to $5000 a monthly mortgage payment, not including all the other expenses associated with owning a home?

If your answer to both is yes, then knock yourself out.
Old 03-21-08, 10:42 AM
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Once he buys the house, the value of the house doesn't mean a thing (except for tax rates which I imagine everyone would prefer to go down) until the day he goes to sell it.

I love how folks watch the estimated value of their property on a daily basis and then freak when it goes down. I'm happy when it goes down, makes for smaller taxes for me.

The only time I want my property value to go up? The day before I sell it.


The house is clearly not just an investment for him, it's going to be a place for him to live and get in the market. There IS value in that.

If you take that away..well, why buy a plasma tv today when in 10 years you will be able to buy the same TV for a few bucks? Answer: because you will use, enjoy, and get value out of your purchase.

If he buys the house, sure it will go down in value with the market continuing down, but by then maybe he wouldn't have found a house he liked, regardless of how good the deal was. As long as he isn't planning on selling it for awhile and is able to get his money back or make money in 5-10 years, it's a good investment. Maybe it wouldn't be the maximum return he could have gotten on his investment, but it's relative. To him, having a nice place to live that he owns and can modify how he wants and make a little money on may be more appealing to him then buying a place he doesn't like as much for whatever reason and getting an extra 20k out of down the road.

Last edited by Jeeden; 03-21-08 at 10:46 AM.
Old 03-21-08, 11:17 AM
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The good time is when no one knows it is, but everyone here seems to know it is, so it cant' be. As soon as you say to yourself, "This is the absolute worst time to buy a house" buy one.

While many people look at their primary residence as an investment, I think that is a terrible thing to do. They may turn out that way, but it your outlook is many years, history shows there is rarely a bad time to buy.
Old 03-21-08, 12:08 PM
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Originally Posted by kvrdave
The good time is when no one knows it is, but everyone here seems to know it is, so it cant' be. As soon as you say to yourself, "This is the absolute worst time to buy a house" buy one.
Thanks! I've added it to my list.


Last edited by Th0r S1mpson; 03-21-08 at 12:23 PM.

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