Profile picture for hankbailey

First Time Home Buyers and First Purchase Timing

If you are a First Time Home Buyer "to-be," what is your main impediment to buying at this time?  What factors would motivate your or allow you to move forward with a home purchase?
  • April 22 2009 - Athens
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Answers (12)

Profile picture for ibcrewin
I'm so ready to pull the trigger. Financing is in place. My LL knows I'm ready. I have my new commute planned out. Just waiting to find the right house that's within my budget. Since prices are dropping the houses are getting nicer and I am getting closer.
  • April 22 2009
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Profile picture for hankbailey
ibcrewin,

How many weeks have you been on the hunt? 

Hank Bailey
  • May 06 2009
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Profile picture for falsedawn
"What factors would motivate your or allow you to move forward with a home purchase?"

House prices dropping to historically reasonable levels by most rational metrics (income multiples, historic price growth compared to inflation, rent/purchase cost comparisons etc.)
Just because houses have dropped 40% from bubble highs, does not make them "bargains".

Interest rates: Mostly irrelevant
Tax credit: Irrelevant
REA comments about "best time to buy etc": Irrelevant
99% of posts on this forum: Irrelevant

The bottom will be lengthy and will only form after unemployment and foreclosures have stabilized, and confidence returns to the market.

How on earth can it be considered a good time to buy when unemployment is rising, more foreclosures are coming and people are basically scared sh*tless of losing their jobs, hoarding cash like crazy because their 401Ks and any equity in their homes has been decimated?

The bottom will be pretty hard to miss, and we are not there yet, not by a long way....

  • May 06 2009
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Profile picture for hankbailey
back to falsedawn; "House prices dropping to historically reasonable levels by most rational metrics (income multiples, historic price growth compared to inflation, rent/purchase cost comparisons etc.)"

I believe that the NAR's affordability index kind of answers this question in rational metrics doesn't it?  Are you aware of the affordability index or is it just something to throw out due to it is generated from the NAR?  If that is it, let's debate numbers not source if we can.

Beyond that, wow, that is pretty dark falsedawn.  Is this a personal or not with you?  With over half the homes bought in the last month(s) by first time home buyers, I think a few would disagree. All the things you mentioned might keep you from buying, but historically low rates, and pricing that is more in line with historical long-term price or home value growth shows we are at least "in line" with decade long growth and not out of balance on the high side at this point.  With rates at 30 year lows you can almost not go wrong at this point.

Before you cast stones at the fact that I am a Realtor, I am also in American Mensa too so please be wary.
  • May 06 2009
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Profile picture for hankbailey
Let's look at a measure of affordability since it came up in the discussion.

The NAR's Affordability Index's  Methodology is "an index that determines whether or not a family could qualify for a mortgage loan on a typical home. A typical home is defined as the national median-priced, existing single-family home as calculated by NAR. The typical family is defined as one earning the median family income as reported by the U.S. Bureau of the Census. The prevailing mortgage interest rate is the effective rate on loans closed on existing homes from the Federal Housing Finance Board and HSH Associates, Butler, N.J. These components are used to determine if the median income family can qualify for a mortgage on a typical home."
  • May 06 2009
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Profile picture for jdoolittle
I have a secure job, in an area that I want to stay in for a long time, and I'm looking for a relatively cheap house (150ks). Why shouldn't I buy now? I want to buy a house to live in long term, not flip it in a couple of years.

I'll be looking pretty hard this summer.
  • May 06 2009
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Profile picture for hankbailey
jdoolittle,

Thanks for the contribution to the conversation. If you are looking to buy to live in a home as a primary residence, you have a stable income, good credit, and rates are at all time lows, you can not go wrong with a buying pattern that takes you into a house you know you will be in for 3-5 years or longer.

You are not looking for a speculative purchase.  One that might be beaten down after your purchase by high unemployment numbers, foreclosures, and retirement plans that are devalued thanks to the recent downturn on Wall Street.
  • May 06 2009
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Profile picture for weebear
Both me and my wife having great jobs compared to others which has lead us to looking and buying a home at this time. I wouldn't touch a house if i didn't have a great job(Government job). I know way to many people still loosing their jobs right now. I don't know anyone who has lost their government job. I think me and my wife are the exception as from what i was told recently, alot of the homes selling in my area are from people paying all cash for them which is why in the first place our local housing market hasn't been as rough as other areas due to the fact many older folks came here selling their homes in the Bay Area for alot of money and came here to where I live and paid cash for the homes just as they are now. I live in one of the hottest markets for Nevada and Californa where people with money are still coming. So without my great job or my wife's great job and if we just had regular jobs, the $8,000 credit, low interest rates and the lower housing cost would not sway me to buy a house at this time, I would be too scared to and would just keep renting as never owning a house before.
  • May 06 2009
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Profile picture for hankbailey
Thanks for your feedback.  I appreciate your comments.
  • May 06 2009
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Profile picture for tde123
I have my loan but I think I am gonna keep renting I can not find anything I can afford but town homes  and condo's. I am trying to figure out how do people I work with afford these places.
  • May 06 2009
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Profile picture for hankbailey
Thanks for your comments tde123.
  • May 06 2009
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Profile picture for falsedawn
The NAR document looks a bit too general to me - I should have qualified my statements by mentioning that I was referring to my particular locality, where I still see plenty of room on the downside.
It's not "personal" - I have never owned property, but do not feel any the worse for it. My wife and I have good, stable jobs and we have saved a substantial downpayment - I just really do not think it is the right time to buy (in our area) now.
We intend to start looking at the end of this year, and possibly purchase mid 2010.
I really don't understand the attractiveness of "historically low rates" - they have only one way to go, and that's up, putting further downward pressure on prices - I'd rather pay 7% than 5% if I could get a property for $50K less.
All the first time buyers who bought last year and early this year obviously had their reasons - good luck to them, I say.
However, I see absolutely no catalysts that will cause prices to rise in the next 6-12 months, so what can possibly be lost by waiting a while?

I have nothing against realtors per se, just those who constantly regurgitate hackneyed phrases and make blanket self-serving statements with nothing to back them up.
  • May 06 2009
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