When is the best time to buy??????????

F

firsttimehomebuyer_IHB

New member
I was almost into buying a condo last month, Due to the price issue(as the seller was very firm on the price), I dropped my idea....and I am very happy that the seller dint agree to my price.When do you think is the right time to buy(As sometimes I do get tempted to buy seeing the price fall :).....How long do you think I need to hold on?
 
Let's see...When you have enough money to put 20% down and would be able to spend no more than 30% of your income paying your mortgage, property taxes, and other costs of ownership discussed in other threads on this forum.
 
[quote author="newbie" date=1222492263]I was almost into buying a condo last month, Due to the price issue(as the seller was very firm on the price), I dropped my idea....and I am very happy that the seller dint agree to my price.When do you think is the right time to buy(As sometimes I do get tempted to buy seeing the price fall :).....How long do you think I need to hold on?</blockquote>


Check out the analysis posts on the main blog. You will find much discussion of your question there.



The best time to buy is when interest rates are very high and credit availability is very low. You will have the least competition for properties, and you will be paying a very low price. When interest rates fall, you can refinance into a lower payment or an accelerated amortization schedule. I estimate that 2010-2014 will be a great time to buy.
 
[quote author="IrvineRenter" date=1222493493][quote author="newbie" date=1222492263]I was almost into buying a condo last month, Due to the price issue(as the seller was very firm on the price), I dropped my idea....and I am very happy that the seller dint agree to my price.When do you think is the right time to buy(As sometimes I do get tempted to buy seeing the price fall :).....How long do you think I need to hold on?</blockquote>


Check out the analysis posts on the main blog. You will find much discussion of your question there.



The best time to buy is when interest rates are very high and credit availability is very low. You will have the least competition for properties, and you will be paying a very low price. When interest rates fall, you can refinance into a lower payment or an accelerated amortization schedule. I estimate that 2010-2014 will be a great time to buy.</blockquote>


IR has once again pin pointed a good window as well as financial strategy. You may lose a point for refinance and other fees but the financial saving for the purchase will be much greater than a point. I agree totally. Buying a resale will also give you more bargaining leverage than buying new from a builder. Most builders will say "they don't control the price" just to shut you up.
 
[quote author="IrvineRenter" date=1222493493][quote author="newbie" date=1222492263]I was almost into buying a condo last month, Due to the price issue(as the seller was very firm on the price), I dropped my idea....and I am very happy that the seller dint agree to my price.When do you think is the right time to buy(As sometimes I do get tempted to buy seeing the price fall :).....How long do you think I need to hold on?</blockquote>


Check out the analysis posts on the main blog. You will find much discussion of your question there.



The best time to buy is when interest rates are very high and credit availability is very low. You will have the least competition for properties, and you will be paying a very low price. When interest rates fall, you can refinance into a lower payment or an accelerated amortization schedule. I estimate that 2010-2014 will be a great time to buy.</blockquote>


I agree with your target price estimates, but I don't know if this is the best strategy. There is a good chance interest rates will *never* be as low as they are now. You yourself have made a big deal about how many banks are screwed because people have been irresponsible with credit. This doesn't translate to lower interest rates in the next 5 years.



I think prices will come down more in the future, but at a certain point its better to buy *before* the bottom because a low interest rate over 30 years is going to save you a lot more money than another 5% price drop.
 
[quote author="25w100k+" date=1222495580] a low interest rate over 30 years is going to save you a lot more money than another 5% price drop.</blockquote>


Um, yeah, but I think the more relevant question is will it save you more money than another 30% price drop?
 
[quote author="bigmoneysalsa" date=1222498976][quote author="25w100k+" date=1222495580] a low interest rate over 30 years is going to save you a lot more money than another 5% price drop.</blockquote>


Um, yeah, but I think the more relevant question is will it save you more money than another 30% price drop?</blockquote>


People move every 7 year, you save interest on 30 years if you stay put for 30 years.
 
[quote author="25w100k+" date=1222495580][quote author="IrvineRenter" date=1222493493][quote author="newbie" date=1222492263]I was almost into buying a condo last month, Due to the price issue(as the seller was very firm on the price), I dropped my idea....and I am very happy that the seller dint agree to my price.When do you think is the right time to buy(As sometimes I do get tempted to buy seeing the price fall :).....How long do you think I need to hold on?</blockquote>


Check out the analysis posts on the main blog. You will find much discussion of your question there.



The best time to buy is when interest rates are very high and credit availability is very low. You will have the least competition for properties, and you will be paying a very low price. When interest rates fall, you can refinance into a lower payment or an accelerated amortization schedule. I estimate that 2010-2014 will be a great time to buy.</blockquote>


I agree with your target price estimates, but I don't know if this is the best strategy. There is a good chance interest rates will *never* be as low as they are now. You yourself have made a big deal about how many banks are screwed because people have been irresponsible with credit. This doesn't translate to lower interest rates in the next 5 years.



I think prices will come down more in the future, but at a certain point its better to buy *before* the bottom because a low interest rate over 30 years is going to save you a lot more money than another 5% price drop.</blockquote>


Uhh, because rates will never drop over that 30 year period? Don't forget the truism we love to reiterate: you can refinance your interest rate but not the price you paid.
 
The housing market, like any other asset class, goes up and down on a short-term basis. Historically, average appreciation in the OC has been 7% a year. Even if you went more conservative at 5% property values would double in 15 years. Instead of trying to time the market you need to look at several factors:



(1) Are you realistically in a financial position to purchase a home. (i.e. down payment, payments for principle, interest, insurance, HOA, taxes, maintenance, etc) if you can afford at least 10% down, afford the monthly payment (and qualify on a full-doc loan), and have some funds left in reserves then you could check it out. Also, for a short-time you could get up to a $7500 tax credit if you're a first-time homebuyer.



(2) Is the home one that you would enjoy living in for many years? Is it one that could be rented easily if you didn't want to live there, or were forced to move due to a job change or other event?



If you can afford to purchase and you don't need to sell during downturns then it doesn't matter as much if this is the "bottom". It's not good to try and "time" the market. And housing has utilitarian value (i.e. everybody has to live somewhere). Long-term you will be better off being a home-owner than a renter.



All that said, it's a buyers market right now. Most owners are waiting on the sidelines until the short-sales, foreclosures, and excess builder inventory are gone. Honestly, the most motivated sellers right now are the new home builders. For them, they need the cash-flow and they're basically dumping their inventory at 30% off. Just like banks, builders are not in the business of holding real estate. They're paid to build just like banks are paid to lend.



One place to look is Camden Place or Cambridge Lane at <a href="http://columbussquare.com/forums">Columbus Square</a> in Tustin. I don't know about William Lyon but Lennar has their own finance company and they use that to effect the net sale price. Ask them to explain the offer and what it means to your bottom line (all sale prices are not equal).
 
[quote author="columbussquare.com" date=1222561178]The housing market, like any other asset class, goes up and down on a short-term basis. Historically, average appreciation in the OC has been 7% a year. Even if you went more conservative at 5% property values would double in 15 years. Instead of trying to time the market you need to look at several factors:



(1) Are you realistically in a financial position to purchase a home. (i.e. down payment, payments for principle, interest, insurance, HOA, taxes, maintenance, etc) if you can afford at least 10% down, afford the monthly payment (and qualify on a full-doc loan), and have some funds left in reserves then you could check it out. Also, for a short-time you could get up to a $7500 tax credit if you're a first-time homebuyer.



(2) Is the home one that you would enjoy living in for many years? Is it one that could be rented easily if you didn't want to live there, or were forced to move due to a job change or other event?



If you can afford to purchase and you don't need to sell during downturns then it doesn't matter as much if this is the "bottom". It's not good to try and "time" the market. And housing has utilitarian value (i.e. everybody has to live somewhere). Long-term you will be better off being a home-owner than a renter.



All that said, it's a buyers market right now. Most owners are waiting on the sidelines until the short-sales, foreclosures, and excess builder inventory are gone. Honestly, the most motivated sellers right now are the new home builders. For them, they need the cash-flow and they're basically dumping their inventory at 30% off. Just like banks, builders are not in the business of holding real estate. They're paid to build just like banks are paid to lend.



One place to look is Camden Place or Cambridge Lane at <a href="http://columbussquare.com/forums">Columbus Square</a> in Tustin. I don't know about William Lyon but Lennar has their own finance company and they use that to effect the net sale price. Ask them to explain the offer and what it means to your bottom line (all sale prices are not equal).</blockquote>


Wow! No bias here!



I beg to differ - I and many others are absolutely timing the market and are wealthier and more secure because of it. And, yes everybody needs a place to live. Ever heard of renting?
 
[quote author="columbussquare.com" date=1222561178] It's not good to try and "time" the market. </blockquote>


Try and tell that to the many homeowners who failed to time the market with due diligence and are now out on their ear.



... this message brought to you by irvinehousingblog.com
 
ColumbusSquare.com,



Thank you for your post. You touched on every fallacy of real estate in your sales pitch. You serve to remind us that kool aid intoxication is alive and well.
 
[quote author="irvinesinglemom" date=1222561423]

I beg to differ - I and many others are absolutely timing the market and are wealthier and more secure because of it. And, yes everybody needs a place to live. Ever heard of renting?</blockquote>


You being able to time the market now is pure luck. No one knows how long a bull or bear market will last. Most people don't wait 10 or 20 years to buy a house, except for perpetual renters or single moms.
 
[quote author="asianinvasian" date=1222564301][quote author="irvinesinglemom" date=1222561423]

I beg to differ - I and many others are absolutely timing the market and are wealthier and more secure because of it. And, yes everybody needs a place to live. Ever heard of renting?</blockquote>


You being able to time the market now is pure luck. No one knows how long a bull or bear market will last. Most people don't wait 10 or 20 years to buy a house, except for perpetual renters or single moms.</blockquote>




Yup, pure luck. Don't you know real estate prices go up forever? It is just "luck" that they are going downward now.
 
[quote author="SoCal78" date=1222564538]"...except for perpetual renters or single moms."



Where is the "No Thanks" button in these comment boxes?</blockquote>


It's called the ignore button, it works with out fail to prevent you from seeing some of the dumbest posts ever on IHB. However, if you want to read the dumbest posts ever on IHB, then check out some of the highlights of the poster before you hit ignore. I believe there is a thread where acpme and I highlighted some the better quotes.
 
[quote author="IrvineRenter" date=1222563254]ColumbusSquare.com, Thank you for your post. You touched on every fallacy of real estate in your sales pitch. You serve to remind us that kool aid intoxication is alive and well.</blockquote>


I think you missed my point. Real estate is not a quick in & out type of asset. You need a long term approach. If you bought a few years ago, and you can actually afford your house, you'll be fine. Wait until the credit crisis and the excess of short-sale inventory is purged from the system. Only about 5-10% of the market is setting the prices right now. If you buy now, don't do it because you think "Wow, prices have dropped 30%, this is the bottom, it's time to buy and in a few years I'll make a quick profit".



My knowledge of Columbus Square was not a sales pitch, it just happens to be a market that I've researched a lot. The principles are the same for all of the O.C.



Luck is only required for the people who try to time the market. If you buy good properties that you can actually afford and maintain a long-term approach (i.e. 10 years minimum) statistical evidence says that you're net worth will increase.
 
A lot of people are loosing money in the stock market. Money that is earmarked for a down payment. So the housing market is not going to get pretty soon even with bail out. So that is another reason why it will take time to work out this mess. If you can guarantee you have employement for 30 years then you can buy without paying attention to what's going on.
 
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