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Best Answer
- Frank Allen, "Frank Allen"
- Contributions:87
I am getting a lot of buyers and there has been a lot of activity this year. Every market is a bit different. Washington is one of the more difficult markets to read. I do think some people are paralyzed by fear and ignorance. The future is pretty uncertian and there is so much information and misinformation right now, it is understandable. When rates and prices both start to rise and it is apparent that they missed the bottom, whatever that is, it will be everyone into the pool. People that plan to buy and nest, who feel that they have employment stability, should look at personal affordability and make a long term home purchase as soon as they find a home that they really like.
Jason: since you are too lazy to read the posts on here,
supply is increasing, demand has dropped. Supply and demand are leading indicators of future price changes, so the obvious economic conclusion, is that prices will drop further.
As buyers are constrained by how much they can borrow, if rates go up demand will merely drop that much more, and prices will fall even further.
Your own example shows the downward pressure rising rates will/would have on price, and yet it seems to go right past you why buying because of low rates is a bad idea?
supply is increasing, demand has dropped. Supply and demand are leading indicators of future price changes, so the obvious economic conclusion, is that prices will drop further.
As buyers are constrained by how much they can borrow, if rates go up demand will merely drop that much more, and prices will fall even further.
Your own example shows the downward pressure rising rates will/would have on price, and yet it seems to go right past you why buying because of low rates is a bad idea?
- Pasadenan
- Contributions:21466
For a clearer understanding of why housing prices are going to continue to drop across the entire nation for at least another 2 years no matter what REA's do, one may want to read the thread:
Zillow's Spamtionary...
Zillow's Spamtionary...
- Jason Ripke, "JasonRipke"
- Contributions:18
The main answer I hear is buyers are not concerned that rates will go back up in the next 12 months or so.
With rates at an all time low (avg rate over past 30 years is about 8.5% and todays rate is around 4.5%) and property prices at 3-5 year lows, presents MONUMENTAL affordability!
If there is a hint of positive economic news, then the market could drive rates up by 1/2 to a full percent and even more in a matter of days...
To maintain the same pmt as a 4.5% rate on a $400,000 mortgage when rates increase by 1/2% your purchasing power declines to $377,000 and a 1% increase drops your purchasing power all the way to $357,000...
The best advice to buyers is to buy now while interest rates AND home prices are down...!
With rates at an all time low (avg rate over past 30 years is about 8.5% and todays rate is around 4.5%) and property prices at 3-5 year lows, presents MONUMENTAL affordability!
If there is a hint of positive economic news, then the market could drive rates up by 1/2 to a full percent and even more in a matter of days...
To maintain the same pmt as a 4.5% rate on a $400,000 mortgage when rates increase by 1/2% your purchasing power declines to $377,000 and a 1% increase drops your purchasing power all the way to $357,000...
The best advice to buyers is to buy now while interest rates AND home prices are down...!
- WA2010
- Contributions:17
It's been a 3 year decline in prices, but it's been a 4-5 year "irregular" running up in prices. So it'll probably take another year or so to get this beast down to earth. Of course, you have to have sufficient employment to sustain the buying power. Setting the housing prices aside, and viewing only from the employment standpoint, are people better off today than they were in 2002?
- Dan, "the_country_hick"
- Contributions:4699
If I was going to buy a brand new car straight from the factory to drive until it dies of old age when would I be smartest to buy that car?
At the "model year end clearance" of course.
We have been trained to buy new cars when they are marked down.
We have been trained to buy all the clothes we need for the year at the "back to school sale" even when we turn age 89.
We have been trained to buy shoes ONLY when they are on sale.
We have been trained to go out on "black friday" for early great deals.
We have been trained to wait almost until christmas to get the best buys.
We have also been trained to know that house prices will drop even more. Buying now will remove the sales price that will save us a lot of $$$ when we buy at the right time (much later than now)
3 years of housing price declines are still saying wait to buy. Best prices are still ahead of us not behind us now.
At the "model year end clearance" of course.
We have been trained to buy new cars when they are marked down.
We have been trained to buy all the clothes we need for the year at the "back to school sale" even when we turn age 89.
We have been trained to buy shoes ONLY when they are on sale.
We have been trained to go out on "black friday" for early great deals.
We have been trained to wait almost until christmas to get the best buys.
We have also been trained to know that house prices will drop even more. Buying now will remove the sales price that will save us a lot of $$$ when we buy at the right time (much later than now)
3 years of housing price declines are still saying wait to buy. Best prices are still ahead of us not behind us now.
- Kevin McDonald, "Kevin.McDonald"
- Contributions:62
I agree unemployment
- Joe Sciarrino, "Joe Sciarrino"
- Contributions:246
Weber hit it correctly. Unemployment/Job stability and the fact that many people still believe that rates/prices have not bottomed out yet.
- The Weber Team, "TheWeberTeam"
- Contributions:131
I think it has to do with job security. Since companies aren't as stable as a few years ago, I think buyers are nervous still.
- WA2010
- Contributions:17
On the other hand, when the interest rates start moving up, it means less buying power for consumers. So wouldn't that have downward pressure on the housing prices since people cant' afford as much?
I just don't see interest rate and housing prices both going up at the same time...especially in this economy. Maybe high end homes, but not your regular mid tier houses.
I just don't see interest rate and housing prices both going up at the same time...especially in this economy. Maybe high end homes, but not your regular mid tier houses.
- broker_GRI
- Contributions:3454
When us agents stop "pleading" for buyers "to buy already"
It will be "a great time to buy"
It will be "a great time to buy"
- Pasadenan
- Contributions:21466
It is obvious that prices across the entire United States will be lower 2 years from now than they are presently; and that interest rates will not be any higher. (Unless the government continues to postpone price adjustments by continuing to throw borrowed money give-aways at it; or unless the federal government opens the borders to anyone in the world that wants citizenship).
So, everyone should just stop buying completely for the next 2 years. And then they can buy what they want at a very good price. (Didn't they every teach you anything about "delayed gratification" when you were growing up)?
No one "needs" to buy a house. Where are they living now? Obviously they are living somewhere. They can continue to live there without throwing away 6% to 10% of the value of a house on unnecessary over priced real estate transactions.
Really, who cares if 2 million REA's and all their brokers have no income for the next 2 years? They can easily find something else to do. The good REA's will stay in business. The REA industry is presently substantially over-saturated with people because of "bubble years" "easy money". The industry is long over due for weeding out.
And for all those REA's that really believe that this is the "best" time "ever" to buy a house; they can go and spend their own money and buy 350 each. And they can "over-leverage" as many of them did during the bubble years, so that they can be underwater again.
And they can buy my house for $4.2 million also. For that price, I certainly don't need it.
So, everyone should just stop buying completely for the next 2 years. And then they can buy what they want at a very good price. (Didn't they every teach you anything about "delayed gratification" when you were growing up)?
No one "needs" to buy a house. Where are they living now? Obviously they are living somewhere. They can continue to live there without throwing away 6% to 10% of the value of a house on unnecessary over priced real estate transactions.
Really, who cares if 2 million REA's and all their brokers have no income for the next 2 years? They can easily find something else to do. The good REA's will stay in business. The REA industry is presently substantially over-saturated with people because of "bubble years" "easy money". The industry is long over due for weeding out.
And for all those REA's that really believe that this is the "best" time "ever" to buy a house; they can go and spend their own money and buy 350 each. And they can "over-leverage" as many of them did during the bubble years, so that they can be underwater again.
And they can buy my house for $4.2 million also. For that price, I certainly don't need it.
2008 "rates are the lowest they've been and prices have come down, buy now!"
2009 "rates are the lowest they've been and prices have come down, buy now!"
2010"rates are the lowest they've been and prices have come down, buy now!"
Eventually, like a broken clock, you will be right, but my gosh, do you realize, as a group all together, how stupid most sales agents have been?
2009 "rates are the lowest they've been and prices have come down, buy now!"
2010"rates are the lowest they've been and prices have come down, buy now!"
Eventually, like a broken clock, you will be right, but my gosh, do you realize, as a group all together, how stupid most sales agents have been?
- Dan Balke, "dkbalke"
- Contributions:9
Obviously now is a great time buy; rates are low and home prices are still below the mean. I see two reasons why buyers are still hesitating. First, the mortgage market is very tight. If you don't have excellent credit you may not qualify for the terms that you want. Secondly, the employment rate is still very high. Many do not want to take a chance if their job is not secure.
- Patti P. Chrisman, "housebroker"
- Contributions:37
It all has to do with consumer confidence. Since rates are currently at a 50 year low, it would make sense that people would want to take advantage of this awesome opportunity to make a change. However, the media reports the unemployment rates and foreclosure rates etc. nationally and it ends up effecting all markets. Some price ranges in our market are seeing longer market times but we are not seeing any significant drops in house values. Many of our summer buyers acted during the tax credit being availilble. I personally feel like it is an excellent time to buy.
- Simon Mills, "Mills Realty"
- Contributions:1858
There are many factors that are causing buyers to be cautious even with historic low interest rates. Double digit unemployment, unstable stock market, and an over abundance of delinquent mortgages all signs that we are nowhere near a bottom.
Simon Mills
Mills Realty
Simon Mills
Mills Realty
- jdsdaddy
- Contributions:551
I see that a lot of agents are saying that people aren't buying because of fear and uncertainty. Hate to break it to you but most of those who easily qualify to buy but are holding off are the least fearful and uncertain bunch of folks out there.
I actually think that it's the fearful and uncertain people who are doing a lot of the buying right now and in recent months. They are fearful of missing out on "the lowest rates ever!" and all the free government money and are uncertain that prices will ever be any lower. I'm pretty sure that these same people completely rely on their agents for good, sound, and impartial advice.
I actually think that it's the fearful and uncertain people who are doing a lot of the buying right now and in recent months. They are fearful of missing out on "the lowest rates ever!" and all the free government money and are uncertain that prices will ever be any lower. I'm pretty sure that these same people completely rely on their agents for good, sound, and impartial advice.
- openup
- Contributions:104
Personal uncertainty is at an all time high. The average consumer does not consider himself a financial wizard and many just believe it is safer to sit out and see what happens. Unfortunately the problem becomes self perpetuating and the buyer hesitancy adds to the uncertainty.
- Erin Groover, "N.GA House Huntress"
- Contributions:35
It is such an amazing time to buy, the interest rates on top of low prices make it pretty enticing from an investment standpoint, wish I had more buyers thinking the same thing. These rates are sure to climb sooner than later. I know there are a lot of people hesitant due to foreclosure's, short sales, market dips, uncertainties etc but it's my hunch that the best time to buy is when the market is slow, as soon as the market turns a corner, the timing will be gone.
- dacolan
- Contributions:1073
Post of the week, Dunes!
- Dunes....
- Contributions:3894
Agents with Expert Marketing Skills share their Expertise 2006
Interest Rates are Lower than ever before, Better Buy cause they have to go up any Second now..Won't know the Bottom till it ya miss it..The Buyers ain't Experts like us they are paralyzed with ignorance of this complicated RE Stuff
Agents with Expert Marketing Skills share their Expertise 2007
Interest Rates are Lower than ever before, Better Buy cause they have to go up any Second now..Won't know the Bottom till it ya miss it..The Buyers ain't Experts like us they are paralyzed with ignorance of this complicated RE Stuff
Agents with Expert Marketing Skills share their Expertise 2008
Interest Rates are Lower than ever before, Better Buy cause they have to go up any Second now..Won't know the Bottom till it ya miss it..The Buyers ain't Experts like us they are paralyzed with ignorance of this complicated RE Stuff
Agents with Expert Marketing Skills share their Expertise 2009
Interest Rates are Lower than ever before, Better Buy cause they have to go up any Second now..Won't know the Bottom till it ya miss it..The Buyers ain't Experts like us they are paralyzed with ignorance of this complicated RE Stuff
Agents with Expert Marketing Skills share their Expertise 2010
Interest Rates are Lower than ever before, Better Buy cause they have to go up any Second now..Won't know the Bottom till it ya miss it..The Buyers ain't Experts like us they are paralyzed with ignorance of this complicated RE Stuff
The Public..2010
Yawn ZZzzzzz ZZzzzzz
And the Boy cried Wolf but the Villagers remembering all the other times ignored him .......
Interest Rates are Lower than ever before, Better Buy cause they have to go up any Second now..Won't know the Bottom till it ya miss it..The Buyers ain't Experts like us they are paralyzed with ignorance of this complicated RE Stuff
Agents with Expert Marketing Skills share their Expertise 2007
Interest Rates are Lower than ever before, Better Buy cause they have to go up any Second now..Won't know the Bottom till it ya miss it..The Buyers ain't Experts like us they are paralyzed with ignorance of this complicated RE Stuff
Agents with Expert Marketing Skills share their Expertise 2008
Interest Rates are Lower than ever before, Better Buy cause they have to go up any Second now..Won't know the Bottom till it ya miss it..The Buyers ain't Experts like us they are paralyzed with ignorance of this complicated RE Stuff
Agents with Expert Marketing Skills share their Expertise 2009
Interest Rates are Lower than ever before, Better Buy cause they have to go up any Second now..Won't know the Bottom till it ya miss it..The Buyers ain't Experts like us they are paralyzed with ignorance of this complicated RE Stuff
Agents with Expert Marketing Skills share their Expertise 2010
Interest Rates are Lower than ever before, Better Buy cause they have to go up any Second now..Won't know the Bottom till it ya miss it..The Buyers ain't Experts like us they are paralyzed with ignorance of this complicated RE Stuff
The Public..2010
Yawn ZZzzzzz ZZzzzzz
And the Boy cried Wolf but the Villagers remembering all the other times ignored him .......
- Pasadenan
- Contributions:21466
Here is a thought... take the first order derivative of the median trend chart. (For that matter do it for the upper and lower tier as well, and also for the condo and SFR charts, and for various number of bedrooms). The new chart would be the "change in value" chart. Look for the "zero crossings". And look at the rate of change (the slope). Then factor in any government interventions that are put in place or will be removed.
If you can't read that, you must have skipped your High School math courses.
If you can't read that, you must have skipped your High School math courses.
- Pasadenan
- Contributions:21466
Roberto told me when the peak of the housing prices in my area was within a 60 day window, just from a small amount of data I posted from Zillow. (The prices had stopped rising and were remaining steady, and the inventory was rising). Since that "prediction", prices and values were dropping an average of $10k per month for almost 2 years straight. It was only delayed by the government give-aways. And even with the end of the Federal Give-away, it is still delayed by the State give-away that replaced it.
I don't think the market is hard to read at all. I just think that some REA's don't have any experience in reading market indicators, and don't want to as it would be contrary to their "training" to attempt to influence outcomes by expecting the results they personally want. (No, Normal Vincent Peale philosophy does not work, no matter what they teach you in those required motivational seminars).
I don't think the market is hard to read at all. I just think that some REA's don't have any experience in reading market indicators, and don't want to as it would be contrary to their "training" to attempt to influence outcomes by expecting the results they personally want. (No, Normal Vincent Peale philosophy does not work, no matter what they teach you in those required motivational seminars).
I did sell in late 2005, 4 of my properties...
"nobody ever realizes the top or the bottom in the moment." true, but you don't need to, all you need to know, is that it isn't now. With supply slowly rising at a time of the year it normally falls, (up 3% in just 2 months) and demand down 30% since the first time buyer's credit ended, prices are set to fall more.
You see, in housing, price is a lagging indicator, supply and demand are leading indicators.
Now, another sales agent can reply with some more simplistic nonsense that belongs on a bumper sticker.
"nobody ever realizes the top or the bottom in the moment." true, but you don't need to, all you need to know, is that it isn't now. With supply slowly rising at a time of the year it normally falls, (up 3% in just 2 months) and demand down 30% since the first time buyer's credit ended, prices are set to fall more.
You see, in housing, price is a lagging indicator, supply and demand are leading indicators.
Now, another sales agent can reply with some more simplistic nonsense that belongs on a bumper sticker.
- Joel Cowart, "JoelCo"
- Contributions:67
Nobody ever realizes the Top or the Bottom in the moment.
It is realized when it starts moving in a different direction.
If we all would have known the Top in 06' Everone would have sold. lol
It is realized when it starts moving in a different direction.
If we all would have known the Top in 06' Everone would have sold. lol
- Craig1976
- Contributions:69
Because we look at our landlord who bought into the dream. Every year she has to decide whether to sell this house and lose her entire investment, or hang on for another year and spend $25k subsidizing our lifestyle. It's like acute vs chronic pain.
Imagine the dent that puts in her quality of life. How fun it must be to spend over $2000 a month on people she barely knows.
Imagine the dent that puts in her quality of life. How fun it must be to spend over $2000 a month on people she barely knows.
- sunnyview
- Contributions:25139
Realtors always say it's a good time to buy, but I think unemployment and previously burned homeowners both make people hesitant. People with a job may already own. Some have had their house foreclosed on and cannot buy again now fro a few years. Others would like to move, but are underwater and would have to bring money to the closing table to do it. Those without a house have seen friends, family and media stories about people chained to a house who's value drops every month.
If that's not enough to make people think twice, I don't know what is.
If that's not enough to make people think twice, I don't know what is.
- Dunes....
- Contributions:3894
Jobs ect. of course all factor in.....BUT
I think it's fairly simple and Rob has covered it well for his Market....People are thinking. (Those who feel they can afford to buy)
Why buy now when I can get the same thing for Less in 6 months, a Year? Why not just learn what I can, watch the Market so I make a wise decision?
Interest Rates..For years now it's been put Forward by RE Agent "Experts"..Interest Rates are Lower than ever, better buy now..4 years of WRONG...The Credibility just is not there
6.5%? Rates are NOT gonna just jump from what they are now to 6.5% in a month or 2 months or 3 months or 6 months..Can't get people to buy now so just exactly WHO is gonna raise rates?
Hurry Hurry buy before the Rates go up, never mind I said that in 2006,2007,2008,2009, 2010 and was wrong..I'm an expert
IMO..The Public has access to a lot of info and they ARE NOT ignorant for the most part just uninformed...They are correcting that and do not appreciate or have much respect for BS plus when they think "Market Experts" they are not Thinking...Real Estate Agents
Right or Wrong, Fair or Not IMO when the vast majority of the Public think RE Agent they are thinking...Good time to Buy? For who, you or Me?
I think it's fairly simple and Rob has covered it well for his Market....People are thinking. (Those who feel they can afford to buy)
Why buy now when I can get the same thing for Less in 6 months, a Year? Why not just learn what I can, watch the Market so I make a wise decision?
Interest Rates..For years now it's been put Forward by RE Agent "Experts"..Interest Rates are Lower than ever, better buy now..4 years of WRONG...The Credibility just is not there
6.5%? Rates are NOT gonna just jump from what they are now to 6.5% in a month or 2 months or 3 months or 6 months..Can't get people to buy now so just exactly WHO is gonna raise rates?
Hurry Hurry buy before the Rates go up, never mind I said that in 2006,2007,2008,2009, 2010 and was wrong..I'm an expert
IMO..The Public has access to a lot of info and they ARE NOT ignorant for the most part just uninformed...They are correcting that and do not appreciate or have much respect for BS plus when they think "Market Experts" they are not Thinking...Real Estate Agents
Right or Wrong, Fair or Not IMO when the vast majority of the Public think RE Agent they are thinking...Good time to Buy? For who, you or Me?
- Pasadenan
- Contributions:21466
Those of us in California are being deceived by another propping of the market by the Government. Although the end of the $8k Federal "give away" was to let the market settle back to an un-inflated status, the State Government intervened with a replacement $10k State income tax give-away.
So, those looking at purchase price trends in California and stating they mean the market stabilized or some other similar misleading marketing statement are simply being deceived by another government market prop. (How people that state the housing market is their "profession" can be so easily deceived by the economic factors in their local area, I have absolutely no idea, unless they are complete liars looking for suckers, or are so busy trying to pay their own mortgage that they don't even know what government programs are doing to pricing).
The question is what will happen when the government prop ends? Roberto states declining all Fall; but if the congress intervenes again to help their incumbents to buy votes... and it comes on the tail of the State income tax give-away funding running out... when will California housing pricing have a chance to re-adjust to the proper level? It will have to be after the end of the "give-aways". And as already documented in multiple locations, an $8k give away typically raises prices anywhere from $12k to $60k, depending on price range being looked at. And without that government prop continuing, that extra $60k of artificial value just vanishes without a trace.
But this thread wasn't supposed to be about California, so California's continued artificially propped up market should be irrelevant to the question about known buying risks in Olympia.
Roberto's comments are right on for Olympia.
So, those looking at purchase price trends in California and stating they mean the market stabilized or some other similar misleading marketing statement are simply being deceived by another government market prop. (How people that state the housing market is their "profession" can be so easily deceived by the economic factors in their local area, I have absolutely no idea, unless they are complete liars looking for suckers, or are so busy trying to pay their own mortgage that they don't even know what government programs are doing to pricing).
The question is what will happen when the government prop ends? Roberto states declining all Fall; but if the congress intervenes again to help their incumbents to buy votes... and it comes on the tail of the State income tax give-away funding running out... when will California housing pricing have a chance to re-adjust to the proper level? It will have to be after the end of the "give-aways". And as already documented in multiple locations, an $8k give away typically raises prices anywhere from $12k to $60k, depending on price range being looked at. And without that government prop continuing, that extra $60k of artificial value just vanishes without a trace.
But this thread wasn't supposed to be about California, so California's continued artificially propped up market should be irrelevant to the question about known buying risks in Olympia.
Roberto's comments are right on for Olympia.
- jadedone
- Contributions:11
I've noticed in the past 2 weeks or so, prices in a few of my target buildings, at the edge of the neighborhood, have dropped by about 25-30%. A few weeks ago they were priced within 5-10% of the better buildings, but now that premium has increased. In some cases the comparison was $220k vs $250k and now it is more like $150k vs $250k. I am hoping that by the time I finish saving up, the price for the best locations/best buildings is more like $180k.
With Rates So Low, Why Are Buyers Still Hesitant?
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