Is now a good time to buy?

Yes now is the the a great time time buy, interest rates are low and houses are priced very low. The worries about a double dip recession are artificial. Most of the people in "PRE foreclosure" are doing loan modifications and will not go to foreclosure. Now is a great time to buy before the market is once again flooded with buyers and the prices go UP!
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August 23 2010 - Calabasas
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Replies (44)

Profile picture for sunnyview
Roughly 50% of mortgage modifications are falling and there is reasonable evidence that a shadow inventory still exists. Unemployment in LA county is running high at 12.4% here. Buyers are not likely to be "flooding the market" anytime soon so people who are interested in buying should do their own research and take their time to decide whether to buy or not.
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August 23 2010
Nathaniel,

Can you provide some sort of scholarly or scientific documentation of your economic predictions. You state things like they are fact (e.g. "artificial double dip worries," and most people "will not go into forclosure."). I would like to know where your magical oracle powers contrary to prevalent economic theories and data trends have been created.
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August 23 2010
Profile picture for hpvanc
It is a SPAMTASTIC time to buy.  Prices are down and dropping, deflation is here, real wage is down.  The Federal Reserve and the US government have tried almost every trick they can think of to reverse the course and get inflation started again, but to no avail.  When they do get inflation started again it will mostly be stagflation where prices of necessities rise, but wages rise slower, interest rates will rise, and property values will rise at less that inflation, or if inflation is low enough continue to drop.

Shouldn't people plan for the contingency, that if their life situation changes they can afford to move?
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August 23 2010
Profile picture for the_country_hick
Now is a fantastic time to buy food for supper. I am getting hungry and food sounds great!!!

Now is not a good time to buy a house. House prices are still above where they started before the bubble. That means they are NOT LOW!  Lower prices are coming and waiting will pay off well.

Having low interest rates actually gives higher house prices compared to higher interest rates as interest increases decrease the amount of payment available for the house price.
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August 23 2010
Absolutely!
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August 23 2010
Profile picture for Dunes....
Absolutely BS!.....

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August 23 2010

Yes If you can find that gem that is way bellow the average market price at least 2by at least 20 %. Most real estate is still to high but some banks and financial corporations are  giving out real good deals. If you can buy really low it's good if not wait. If you are looking for a home to live in the choice is huge and that is good but dont expect to flip.

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August 23 2010
Profile picture for Dunes....


It's sad some Agents think this is wise Marketing and that the Public is dense enough to buy into it just based on an RE Agent said so...

I know..you got an RE License so you're an expert on the Economy, you've got a Code of Ethics so you can be trusted and this is great Unbiased  Professional advice for someone making a Huge Financial Decision..

Based on what?
Is it based on anything besides you have an RE License?

So sad....
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August 23 2010
If you are planning on living in your home for a number of years, there is no reason not to buy now.  Interest rates are probably as low as they are ever going to go and patient buyers can find homes in good shape for below average market values.  Prices have stablized but may go lower.  Like the stock market, real estate is best viewed as a long term investment.  There is no way to find the absolute best time to buy (unless you have a crystal ball to tell you) and each market/home/buyer/deal is different. 

I disagree with original poster on foreclosures.  There will be many more.  I can walk around my neighborhood and see at least 10% vacant.  Only 1/2 of those are currently for sale.  There will be more foreclosures.  Over half of all loan modifications are in default after 9 months.  Some cities have 1/3 or more of homes for sale that are foreclosures and short sales.  This market is not going away anytime soon.  Unemployment is still high and many people have exhausted benefits without finding work.  There will not be a flood of buyers because too many people have destroyed their credit and have no disposable income.

Again, with a long term outlook and a little patience, it is a good time to buy. 
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August 23 2010
Not really. Home prices will continue to fall. The only advantage to buy now is the interest rates are so low. But it only matters if you are putting 20% or more down. The FHA rates will also start to creep up as well. 

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August 23 2010
you can go back over three years on zillow, and according to the Realtors, it has always been the best time to buy!

Nathaniel, "the worries about a double dip are artificial" why, just because you say so? that could easily be one of the denser statements made on here in a long time!
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August 23 2010
He is right, we could just skip a double dip and go straight into a depression.
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August 23 2010
http://finance.yahoo.com/family-home/article/110374/22-cities-in-danger-of-a-double-dip-recession

here is a site that shows if their is a double dip recession it will not be in california.

here is a link explaining my position on the double dip

http://www.thedenverchannel.com/money/23824303/detail.html

here is another site further explaining my point.
http://money.usnews.com/money/blogs/flowchart/2009/10/02/5-myths-about-the-economic-recovery
I have seen a lot of movement lately. I am referring to a local marketplace
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August 23 2010
I think it's a GREAT time to buy.  The problem is unemployment is high, personal credit debt is high, and people are scared with uncertainty. The buyers who want to buy are scared to come off the fence but this is where our job comes in, we are licensed professionals in the real estate field and we have to point out the benefits of buying a home. Like in the previous psots, interest rates are at a historic all time low and house prices have come down dramatically since the highs of late 2006.
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August 24 2010
Since it works here I'll just cut and past a reply I just left on Robs thread


So It's a Great time to buy! ;-)


That's one thing I love about you Rob.
When someone asks how is your market?
You answer with facts and not some silly, fuzzy "let's click our heels together" (crap) to wish it all away

How many more times can we hear "buyers are calling all day"
"I've been really busy lately"
"Interest rates/prices have never been lower" BTW in case you haven't noticed....This has been "true" for years now.

Agents....when someone asks "how is your market?"
Please leave your "positive thinking caps at home" and answer the question with the type of facts we are supposed to know.

One of my favorite real estate coaches (Bill Nasby) said this in one the first seminars I ever attended.

"Tell the truth.....it works every time"
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August 24 2010
Profile picture for sunnyview
Most economists have been really crappy at predicting the market. They did not even see the bubble bust coming so why should anyone believe that they will be right about CA not seeing a double dip? It's taking the advice of a stock broker who tells you they lost 40% of their portfolio when the market dropped.

People need to be informed before they buy and prepared to hold whatever house they buy for at least 10 years while the market finds a bottom. They also should look to keep their rent vs buy numbers close here to provide some additional protection from further drops in the market. It's not perfect protection, but it's better than buying and hoping.

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August 24 2010
Profile picture for the_country_hick
Used houses in July sold 27.2% less than before.

Used house sales were at the lowest numbers since 1995.

No wonder all of these used house salesmen are saying it is a good time to buy. Sales are disappearing and so are the commissions that come from those sales.

A good time to buy? I think not. Slow sales will bring lower prices.
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August 24 2010
Profile picture for HousePoorAmerica
Read the news today? How do you feel about your statement? And to think, people take your advise, amazing!
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August 24 2010
Of course, this is the moment to buy, specially the foreclosure ones or the bank owned. You can find a very good deals and at very good price. But everithing depends on your credit reports, if you have a good credit standart , you have no problems. Go check your credit with a financial institucion before looking for a property, then find a good Realtor, a profecional one. Good luck.
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August 24 2010

   There are a few dramatically different perspectives on this. Agents' arguing that now is a great time to buy because rates are low and prices are low compared to the crazy bubble we had and "country-hick" saying it's a horrible time to buy. I argue that it's not the ideal time to buy in my market from a pure investment standpoint, however, people's life situations and markets vary.

While the agents' argument that it's a great time to buy simply because rates are low and prices are low compared to the bubble is a convenient argument, it's wrong. Although I agree with much of "Country Hicks" argument, saying blanketly that it's a bad time to buy is also not completely correct.

    First, regarding the rate argument, historically people are better off buying when rates are high because prices are lower during those periods and when rates drop they can refinance, while if you buy when rates are low, prices will be relatively high and one cannot change their principle owed with anything but cash. In addition, just because prices are lower than they were at the peak does not necessarily mean they are historically low.

    However, contrary to what Country Hick is arguing, if one can purchase a home with good financing at or below rental parity and ideally plan to hold the property for 15+ years, it could be a good purchase. In addition, there are many markets that have properties at or below replacement cost that with the right financing could be great purchases, especially if the government is successful at getting us out of the recession and creating inflation.

  While every market is different, in my opinion, no one should be buying now that does not plan to hold the property for at least 7+ years with 15 or 30 year fixed financing. Moreover, people should run from agents that simply say it's a great time to buy because "rates are low and prices are low."

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August 24 2010
Profile picture for sunnyview
You make a reasoned argument. My thumb appreciates it. I know it sounds trite, but every market is different. I think that thing that people don't realize is that the market may stop dropping, but remain flat for a chunk of years making it hard to sell or at least hard to recoup purchase costs. Many agents don't see that at all so their clients don't even consider it.

I agree that anyone who buys now needs to plan to hold the property for a longer timetable, but 15 years would be longer than most would want to commit especially for a primary home that does not generally pencil out from an investment standpoint. I think that running the numbers is a good place to start and then people can decide how much or even if they are willing to pay a premium for ownership above the cost of renting.
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August 24 2010
I agree. We have a fundamental valuation analysis, one for owner occupants and one for investors that is based upon rental parity that allows buyers to decide for themselves. Morover, unlike most agents spread sheets, our numbers are conservative and we feel as accurate as possible. We even count lost income from the downpayment as an expesne. Fortunately, our blog has been educating buyer on the market and projecting the bubble since 2006 so most of our clients are savvy. In addition, I agree, 15 years is a long time to hold and most agents do not properly educated their clients on transaction costs nor the risks of buying when rates are at historic lows. Many of our clients that purchase,  understand that even if they don't live in the home for 15 years, with rates this low, if they want to move in 7 years, their best option will likely be to rent. Moreover, they know how that will effect their cashflow using today's rental comps.
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August 24 2010
There has not been such a great opportunity to buy in a long time. Prices are very low and interest rates are at historically low levels. If you are thinking of buying now is an excellent time.
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August 24 2010
Shevy,
Your post is outstanding!
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August 24 2010
As others have stated with low interest rates, it is good to lock in a great mortgage rate. That said, loans are not s easy to come by, with the newer loan restrictions placed on lenders by the government. If you can qualify, lock in now, it will not last forever.
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August 24 2010
Yes! NOW is a great time to buy real estate. Property values have fallen and most importantly so have interest rates....to RECORD LOWS! Rates will eventually begin to creep back up so don't miss this opportunity!
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August 24 2010
Seriously Peggy/Bob, do you really think if you keep repeating the same mantra over and over that people will begin to believe it?!
At the very least, say something that adds something of value, that hasn't been said a gazillion times before.
Try to make a valid argument rather than repeating what sounds like NAR propaganda.
Otherwise you are just "driveling".
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August 24 2010
Profile picture for HousePoorAmerica
I have a question for all the agents on this thread. Since

Interest rates are at an all time low and according to your BS that prices are low,,, Are you purchasing realestate right now or have you recently… I would bet most of you are either upside down on your loan or are renting….. Come on, I dare you to answer……. Renters

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August 24 2010
Profile picture for sunnyview
Apparently it is always a good time for Peggy and Bob's clients to buy as long as they get paid. Agents like that should be given the boot by their clients as soon as they stick their foot in the door.

It is possible to find a good agent with honesty and market knowledge. I suppose that Peggy and Bob's empty posts save those clients a phone call.
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August 24 2010
Right now, home prices are in a state of fluctuation. They're rising (slightly) in some areas and falling in others. But just because home prices might fall before they rise again shouldn't keep you from making an offer on a home as long as you find the right house at the right price on the right terms. I will be closing on a new home in less then 45 days. Yes, as a Realtor, I am buying now. 
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August 24 2010
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