A good indicator for me is when 1. Competition to buy foreclosed and REO property becomes very hard. AKA :buyers overpay for junkers. 2. Days on market begin to decrease from over 180 days to 90 days or less. 3. Property owners start getting 93% to 95% of asking price. 4. Number of building permits pulled start to increase consistantly over a three month span. 5. Every Mary, Jane, Sue, Tom, Dick and Harry start getting their RE license.
It's funny that I find myself in the worst situation in this real estate market. Due to a temporary job transfer turning into a permanent transfer, I need to sell my home in Orlando and buy one in Dallas. Checking the local real estate markets it seems my Orlando home has dropped over $100K in value in the last three years while the Dallas market has suffered little decline. Makes one think about turning to bank robbery.
By buying now when rates are historically very low, you risk price depreciation as rates rise down the road, making housing less affordable for buyers. I'll be a bear until I can figure out where new US economic growth will come from. So far I still can't find it. That doesn't mean certain thing won't go up in price....gold, oil, grains should catch a bid over the next year or two. Some say we're still battling deflation, which may or may not be true, giving you another reason not to buy, unless someone hits your very low bid. GL!
Yes. And the lower morgage payment gives more return on cash from a difference of morgage payment and rent you can collect. OldTrader, from that rent collected that is more than the morgage, you think it is smart to go further and put that extra cash on the principle, so in the big picture,you pay less interest than the 5.8% you begin with?
I'm glad a few people on this thread have pointed out the moronity of the shibboleth that "its a good time to buy when rates are low" Its exactly the opposite - you want to buy when rates are high. That way get an appreciation or refi kicker when rates come down. When rates are low, that means they have one direction to go. When they do go up, the value of your real property decreases (other things being equal). Of course, if you know for a fact that you'll be staying in the house for the next 30 years, then go ahead and buy when rates are low.
Ok, but if the buy is for to rent, then to start it is better to have a lowest monthly payment(fixed) so there is extra cash after the rent pay the morgage. To put this extra cash back to the principle, in the big picture you build equity, pay less interest, and if the house depreciate before appreciate, time will bring it back. In that time to come back, you come much closer to paying down the principle, and much less interest to the bank. When appreciation happens again, it will be a huge equity in the home from payment on the principle. I ask your opinion what you think of that. I see 10 year time for this, not 30.
we have most likely not reached a bottom. my opinion is that the decline may continue for several more years. there will be not significant reason for prices to stabilize anytime soon. interest rates will go up, which will effect the amount people can pay for a house and due to the high amount of national debt coming up and the increasing tax rate, people's buying power will dimish. in addition, there may also be several more waves of forecloures coming in the next several years due to risky lending packages.
I have one very reliable indicator for picking the bottom of real estate bear markets, but I can't disclose it. However I will post here if I see the real estate bear market end.
Call me stupid, but I am of the opinion that most prospective home buyers are EMPLOYEED. When EMPLOYMENT starts to rise, I am led to believe that it would be GOOD NEWS for the housing market.