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Should I buy now or wait a year?

Profile picture for rbjrn0112
I am a first time homebuyer looking to buy a primary residence in Columbia,SC.  I am currently renting a home.  Should I buy now (8K incentive and low APR) or should I wait a year.
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April 14 - Columbia
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Profile picture for sunnyview
Contributions: 10842
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Since January 2009

Congrats on your new house missixty! It sounds like you did your research and got a good deal for your situation where you can own for less than rent. I wish everybody bought just the way you did. I hope you enjoy your new place.
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May 04
Profile picture for White Picture
Contributions: 1948
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Since March 2009

"Pending sales going up in March over Feb is like saying that temperatures are warmer in March than Feb.  It's a seasonal adjustment and nothing to write home about"

The rise in the index may show a return to normal seasonal housing market patterns. Home sales typically rise in March from February, but last year, the pending sales index dropped 1% from February 2008, and the index of contracts in March 2008 was down 20% from March 2007. So the 1% gain in March 2009 over the same month last year shows a substantial change from the spring season of a year earlier.
In Southern California, the median home sales price has held steady at $250,000 from January through March -- that's less than half the peak median price set in 2007, according to San Diego research firm MDA DataQuick.
http://www.latimes.com/business/la-fi-homes5-2009may05,0,2234983.story
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May 04
Profile picture for coinsareme
If you are buying a "home" get what pleases you, if you are buying a "house" get what makes financial sense. your home is where your stuff is. A house is a house. Realtors always refer to it as buying a "home". Unless you are homeless, you already have a home. Maybe not a house with a mortgage and expenses, but a home never the less. You are looking to buy a house, make it a sound financial decision and you will be happier.
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May 04
Profile picture for nvchaz
Contributions: 1617
Exactly my point!
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May 04
Profile picture for missixty5
I bought my first home this year in Phoenix, yes im aware that it has one of the highest foreclosure rates in the country, but even so, I found a screaming deal and managed to secure a home for less than its appraised value as of right now.  I got a 30 yo fixed FHA loan for about 4.5% and the home value is still almost $20K more than my mortgage loan.  For me it was a good time to buy but it really is your decision.  Plus my mortgage is less than what my rental costs were, so for me it was the best choice.
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May 04
Profile picture for jonestim
Contributions: 68
>If not now, when?

Linda,

Pending sales going up in March over Feb is like saying that temperatures are warmer in March than Feb.  It's a seasonal adjustment and nothing to write home about.

Also, in almost all markets I have been following there have been HUGE price drops after the sales volume increases.    Sales volume increasing is a good sign for Realtors as they may start getting checks again.  Buyers who get in just as sales volumes start increasing will almost always pay more than those who wait until the market is more balanced - under 6 months inventory. 

So, not now.  When it makes financial sense to.
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May 04
http://www.financialnewsusa.com/news/pending-home-sales-up-32

If not now, when?
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May 04
Profile picture for pixlink
Contributions: 11
If you can make money or equity going in then go for it. It's all about the TVM(Time Value of Money). If the market gets any worse you won't have to worry about getting any better deals unless you have all cash. Simply stated even with perfect credit you won't qaulify the banks will be out of business. The criterias for obtaining a loan are getting tighter and tighter every day.
Why pay your landlord's mortgage? Look at your overall financial situation and determine the benefits on one side and the disadvantages on the other and see how they stack up.  Making that first purchase will always be a big nervous step of uncertainty until you actually do it.
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May 04
Profile picture for White Picture
Contributions: 1948
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Since March 2009

"Convincing my wife however to continue to wait is problematic"
Yes, most of the housewive are not too much concern about inflation, deflation, the effect of interest rate or current of economy to the housing market.
even they don't know there is Zillow's website on earth.
They do what ever their friends or their relatives or their neighbors doing, as long as the payment is fit with their bubget, and the willing of the home ownership takeover on every the other concerns.
As Myself sometime thinking about the lost of the value of my properties, however the women in my family are still don't care. they still laugh and make fun to the others like normal.
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May 04
Profile picture for sunnyview
Contributions: 10842
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Since January 2009

I agree with you. Honestly, I just hope we make it out of this bubble. The damage has been so widespread. Our economy is resilient, but it sure has done a number in it for now. 
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May 04
Profile picture for coinsareme
The cure for deflation is easy money and lower interest rates, which ultimately leads to inflation. The cure for inflation is tight money and higher interest rates which leads to deflation. Catch 22. But, over the last 50-75 years inflation has definitely been winning. The pain of a 1930's style depression is just too costly. Therefore, long term bet on inflation. But when a speculative bubble happens bet against it.
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May 04
Profile picture for sunnyview
Contributions: 10842
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Since January 2009

True inflation is a worry. The market is crazy at the core. It is teetering between inflation in some areas and deflation in others. The strategy of holding onto money is great for deflation and not so good for inflation. Buying is a personal choice and you have to do what is best for your area and for where you think thing are going with the economy. Makes me wish that I was an economic guru or something instead of just a plain citizen.
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May 04
Profile picture for coinsareme
Good advice nvchaz and you are very likely correct. Convincing my wife however to continue to wait is problematic. Also, all those billions and billions of newly printed dollars will eventually feed inflation. It a risk. Remember 79-80 inflation led to the Volcher recession and 18% mortgage rates. This time around it may lead to hyper -inflation. Allows debt to be paid off with cheap fiat money. Hmmmm, USA has trillions in debt. Sounds like a plan to me. 
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May 04
Profile picture for sunnyview
Contributions: 10842
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Since January 2009

Coins, so glad to hear that you did well. I totally agree that you do not have to buy at the ultimate bottom or sell at the tippy top to make money. I know that many people think that market timing is not possible, but spotting trends in the market definitely is. You are proof of that. It may not help much, but the people I warned also didn't listen. I wish they had, but they sure see the mistake now. Hopefully, things will go better for them next bubble.
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May 04
The greatest risk beyond the horizon is the one we cannot see.
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May 04
Profile picture for nvchaz
Contributions: 1617
Smart move coins...

Unless you are on the low-end like me I'd wait a little bit more.

2010 is gonna be brutal.
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May 04
Profile picture for coinsareme
Owned real estate since 1971. I sold my house in July of 2004 for cash. Renting since then, owning no real estate. Looking to buy back in this fall. Sold early, but for a hugh profit. Buy back may be early too, but, whosoever wants to get the exact top or bottom of a market  will get neither. Warned everyone it was a bubble, but few listened.
good luck
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May 04
Profile picture for nvchaz
Contributions: 1617
Ingore silent_obsever, that is old theory.

If you can do it under any circumstances where your NET monthly outlays are below rent do so.

You can hunker down with this value and be prepared for when the depression lifts.
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May 04
Profile picture for silent_observer
If you have

income (1X or 2X or max 3X) of the home purchase price
you are sick of renting
you have 20%+ down payment
reserves for 6-12 months liquid monthly expense including mortgage++
cost of renting the home is more expensive than buying
VERY stable job
home prices are reaching a bottom in your area

you can BUY now.
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May 04
Profile picture for space_acer
Contributions: 4346
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Since March 2009

You need to look at how much prices in your region have gone up say from 1999-2000 compared to inflation. Over the long run prices can only go up at rate of inflation/incomes. I suggest you do your own research instead asking others questions.  
http://www.housingbubblebust.com/OFHEO/Other/SouthAtlantic.html

also check using OFHEO Metro prices for SC.

http://www.fhfa.gov/Default.aspx?Page=216&Type=compare&Area1=17900&Area2=&Area3=


The $8000 "hand out" from Congress (Tax Credit) may mean very little if prices decline far more. 



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May 03
Profile picture for akoi
Real Estate Agent
Contributions: 1032
linda, good answer, that's all..
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May 03
If you qualify right now and can find a great deal...definitely go for it!  For buyer's, these are unprecedented historic times never to be seen again.  If you're a seller...it sucks to be you right now.
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May 03
rbjrn, Don't know what your market is doing but I do know REOs are less than 1/2% of our market. They had been between 4&5% of the houses on the market Nov. and Dec. also that prices aren't dropping like they had been. Ask an agent in your neighborhood to check the availability for you.
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May 03
Profile picture for Selling Buying Ryan
Real Estate Agent
Contributions: 113
I would buy now!

Home - Prices - Values are down in some areas 50-70%, Interest rates are the lowest in History. In California we can get a first time buyer a loan around 5%, 3.5 % down, the banks accept a seller participation helping the buyer with 6% for all recurring and none recurring closing costs and our President Obama , gives the first time buyer a TAX credit of up to $8,000 until November 30 of 2009.
As you can see its the best time to get all of the above benefits in 2009.

I would say don't wait, do it.

Ryan
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May 03
Profile picture for nvchaz
Contributions: 1617
I'd buy now. The $8K might go away. Interest rates are sure to climb. REOs may dry up.

If you are a renter do it now. Remember: you will always need a place to live.
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May 03
Profile picture for annpete
Contributions: 7
South carolina's job market is pleak.  One of the highest unemployment in the country.  I too jave an interst in buying.  What sellers do here, if they can wait, is to keep homes are the market for very long periods of time.  There were few affordable homes in my area.  Now, even the lower end prices ($100-155 or so) are not selling quickly.  Unemployment and job instability is taking its toll.  I have to sell a lower end home before I can buy.  Its not an easy road here in SC to accomplish all of that.  Even if u have a great credit score, stable job, the economic climate affects everything.   Homes are not selling here like they once did.
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May 03
Profile picture for Bette Defarm
Contributions: 4637
It's nice to have a good selection to choose from.  It's a good idea to start looking and when you find the right home for the right price, you'll know first hand that you've found a good value.

Replace 'goods' with 'homes' and you have a Kmart commercial.
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April 15
Profile picture for Caveat Emptor
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Since January 2009

spleng thats awsome
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April 15
It's nice to have a good selection to choose from.  It's a good idea to start looking and when you find the right home for the right price, you'll know first hand that you've found a good value. 
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April 14
Profile picture for nvchaz
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Splooge:

[content removed by moderator for being too scathing for the Splooge to bear]
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April 14

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