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Is This a Good or Bad Time to Buy a House?

Posted: Thu Mar 05, 2020 11:46 pm
by CoastalWinds
Lets approach this from strictly an investment/ROI/risk standpoint and set aside the arguments of “its a home, not an investment” and the like.

It seems like there are 2 competing factors occurring and I’m wondering what the “net” effect is likely to be.

1. Mortgage rates are dropping. This often boosts housing prices/values.

2. Fear, stock market correction, and declining economic activity are sinking confidence, which can reduce demand for major purchases.

What say ye? Are house prices (by and large, as I get it’s very local) poised to go up or down if Coronavirus stuff persists? Would you consider this a risky time to buy?

Re: Is This a Good or Bad Time to Buy a House?

Posted: Fri Mar 06, 2020 1:02 am
by mhalley
You are over thinking this. If you need a house and expect to stay in it for 5 plus years, buy a house. If prices go up or dow, it doesn’t matter, most likely you will come out ahead. Real estate markets are like the stock market, no one can predict the future. Interest rate may drop a little, but currently are still very attractive.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Fri Mar 06, 2020 1:22 am
by mega317
+1
Don't time the market. Rates are good and if they get better, refi.
I can't imagine corona affecting housing prices, certainly not in any predictable way. If you're worried people will stop spending any money and therefore the value will drop and you'll have less or negative equity, it's a good reminder to only buy if you're planning to stay for a while, and buy a little less than you can afford.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Fri Mar 06, 2020 1:31 am
by Dilbydog
We’re actually purchasing a home now. If you’re confident in your income stream, the rest is noise.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Fri Mar 06, 2020 3:12 am
by averagelonghorn
I'm a real estate agent, so of course I will say it's a good time to buy a house, it always is. :happy

But that's an overarching statement, whether it is a good time for YOU to buy a house, really only you can say.

I feel good saying its a good time to get a mortgage, rates are really incredibly low.

I know you said to ignore the push and pull of whether buying is a lifestyle decision or an investment decision, but it always a bit of both; even when it looks good as an investment decision, you are almost always weighing whether it is a good lifestyle expense as well, and that should really determine whether it's a good or bad time to buy for you in particular.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Fri Mar 06, 2020 2:45 pm
by deikel
both is hogwash

look at your current housing market and see how the prices are doing over time (look at trulia or zillow values if you want to get a feeling).

The dropping rates will do squat, the rates of the banks are not moving in lockstep anyway and the corona scare has not translated into real impact yet. Depending on where you live, the normal seasonal variation (spring to winter or college season to end) has more short term impact on the pricing than both

Or you live in SFO, where none of this makes any difference and the prices are purely based on fairy dust and off the chart anyway.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Fri Mar 06, 2020 2:47 pm
by SmileyFace
Trying to time a primary home purchase is like trying to time the stock market - its a fools errand. You could wait for a "better time" to buy and see prices increase while you continue to pay rent.
When it makes sense for you to buy, you should buy.
If you are talking about a 2nd home or investment property perhaps its a different conversation.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Fri Mar 06, 2020 5:21 pm
by JoeRetire
CoastalWinds wrote: Thu Mar 05, 2020 11:46 pm Lets approach this from strictly an investment/ROI/risk standpoint and set aside the arguments of “its a home, not an investment” and the like.

It seems like there are 2 competing factors occurring and I’m wondering what the “net” effect is likely to be.

1. Mortgage rates are dropping. This often boosts housing prices/values.

2. Fear, stock market correction, and declining economic activity are sinking confidence, which can reduce demand for major purchases.

What say ye? Are house prices (by and large, as I get it’s very local) poised to go up or down if Coronavirus stuff persists? Would you consider this a risky time to buy?
Real estate is hyperlocal.

You can only gauge the "goodness" of a specific house purchase in the context of the mortgage rate you can get, the price you must pay for the house, and how that fits into your particular financial situation.

And of course you cannot know what any of these factors will be when you decide to eventually sell the house.

It's not a risky time to buy, if it's the right time for you.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 7:20 am
by FIby45
Interesting responses.

No one asked- what's the rental market like in your area? Have you done a rent vs buy calculator? I like the nyt one. Google it.

I rent and could easily buy. Why? Rents where I live are super cheap compared to home prices.

I'm of the minority opinion that buying is not all it's cracked up to be. I think it is just ingrained in our culture.

Here is an interesting anecdote- a very good friend of mine started buying big apartment complexes in 2009 after crash. He syndicates them and they now have over $1 billion in housing in the portfolio- north of 5,000 units.

Guess what. He rents. Why? In the market he is in it makes more sense.

I would also question both your statements about interest rates and home/stock correlation. One of the first couple chapters of "Irrational.Exuberance" by nobel prize winner Robert Shiller shows that homes do not move with stocks always the way you think (see dot.com bust- houses kept rising.for years.). Same as effect of interest rates on housing. (Note: I used.to think the same things.)

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 7:56 am
by geerhardusvos
CoastalWinds wrote: Thu Mar 05, 2020 11:46 pm Lets approach this from strictly an investment/ROI/risk standpoint and set aside the arguments of “its a home, not an investment” and the like.

It seems like there are 2 competing factors occurring and I’m wondering what the “net” effect is likely to be.

1. Mortgage rates are dropping. This often boosts housing prices/values.

2. Fear, stock market correction, and declining economic activity are sinking confidence, which can reduce demand for major purchases.

What say ye? Are house prices (by and large, as I get it’s very local) poised to go up or down if Coronavirus stuff persists? Would you consider this a risky time to buy?
Depends on your market, what house you’re buying, your desires, etc.

Check out this post for guidelines around the rent vs buy calculation: viewtopic.php?p=5480265#p5480265

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 8:07 am
by whereskyle
CoastalWinds wrote: Thu Mar 05, 2020 11:46 pm Lets approach this from strictly an investment/ROI/risk standpoint and set aside the arguments of “its a home, not an investment” and the like.

It seems like there are 2 competing factors occurring and I’m wondering what the “net” effect is likely to be.

1. Mortgage rates are dropping. This often boosts housing prices/values.

2. Fear, stock market correction, and declining economic activity are sinking confidence, which can reduce demand for major purchases.

What say ye? Are house prices (by and large, as I get it’s very local) poised to go up or down if Coronavirus stuff persists? Would you consider this a risky time to buy?
I bought for the simple reason that it was $400/month cheaper than renting a condo and I wanted a yard for my kid. Interest rate drop brought the costs down significantly. Value of my house has still been ticking up despite the pandemic. I of course have no idea where prices are going, but assuming a crash is on the horizon, I'll be happy enough in the house for the next 5 years or so and then may turn it into a rental.

Timing wasn't really a factor. Just the numbers and what we were getting for them.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 8:20 am
by btq96r
I'm getting close to this decision in my life. I keep telling myself, focus on the underlying conditions that tell me if buying a house is right or not from a long-play of my total life, not some net worth booster or numbers game.

I am glad interest rates are almost permalocked this low so I can make the decision on my time and still benefit.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 8:31 am
by eucalyptus
The few markets I have any knowledge of are absolutely booming sellers' markets. Medium mid-Atlantic city, large southeastern city, Rockies resorts. Multiple offers, bidding wars.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 8:40 am
by Jags4186
Here’s how I see it:

If housing values where you are have appreciated: Good time to sell and rent or downgrade home.
If housing values where you are have decreased: Good time to upgrade or be a first time buyer.

You’re in a tough spot if your a first time home buyer and homes are selling like hot cakes. But I hear it’s an excellent time to buy a place in NYC.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 8:49 am
by 260chrisb
CoastalWinds wrote: Thu Mar 05, 2020 11:46 pm Lets approach this from strictly an investment/ROI/risk standpoint and set aside the arguments of “its a home, not an investment” and the like.

It seems like there are 2 competing factors occurring and I’m wondering what the “net” effect is likely to be.

1. Mortgage rates are dropping. This often boosts housing prices/values.

2. Fear, stock market correction, and declining economic activity are sinking confidence, which can reduce demand for major purchases.

What say ye? Are house prices (by and large, as I get it’s very local) poised to go up or down if Coronavirus stuff persists? Would you consider this a risky time to buy?
I'm not sure I understand the question! Are you looking for support to buy a house as an investment or looking for a place to live? There is always risk as it relates to buying a house. When you look at the long term ROI based on buying a house and living in it for 10-20 years it's historically a lot lower than the stock market since you have to consider taxes, interest paid, insurance, and upkeep. Those same costs come into play even in the short term with an investment house and the risk may be higher. The housing market can be very local so it's difficult for anyone removed from your market to know. Folks buy all kinds of risky investments including the market and it's probably as difficult to time the housing market as it is the stock market. On a separate note; with interest rates continuing to be very low, how much lower can they go and do small drops in rates boost home values as a by-product of more buyers seeking mortgages?

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 9:06 am
by prairieman
I figured it’s usually better to buy in areas where populations are expected to grow. In places where populations are expected to shrink, you should probably rent.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 10:00 am
by Valuethinker
CoastalWinds wrote: Thu Mar 05, 2020 11:46 pm Lets approach this from strictly an investment/ROI/risk standpoint and set aside the arguments of “its a home, not an investment” and the like.

It seems like there are 2 competing factors occurring and I’m wondering what the “net” effect is likely to be.

1. Mortgage rates are dropping. This often boosts housing prices/values.

2. Fear, stock market correction, and declining economic activity are sinking confidence, which can reduce demand for major purchases.

What say ye? Are house prices (by and large, as I get it’s very local) poised to go up or down if Coronavirus stuff persists? Would you consider this a risky time to buy?
There is no way of telling.

Unless you live on the coastal area w restricted land use, US housing prices don't rise much in real terms adjusted for depreciation.

So coastal areas it is usually always a good time to buy (ish) and inland or southern cities there is usually no rush. They"ll be building more homes over there in a few more years.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 11:18 am
by novemberrain
It is a 'K' shaped recovery. So if you are in the upward sloping part of the 'K' in terms of both geographic location and income, then yes, maybe ok to buy. If you are in the downward sloping part of 'K', then maybe wait ?

https://www.cnbc.com/2020/09/04/worries ... althy.html

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 11:30 am
by LittleMaggieMae
I think the OP is in the territory of "I have a coupon for money off a product (doesn't matter if I need it or could use it) - is it a good deal to buy it?"

I don't think you can look at purchasing real estate (or a house or a home) purely from the financial aspect of if it's a good deal.

Just like buying a gallon of "raspberry vanilla pukeberry icecream" isn't a good deal solely because you have a coupon and can get it at a steep discount (even if it costs you a penny out of pocket ) IF you don't like raspberry flavor, are lactose intolerant, or have no way to work those calories into your "weight maintenance plan" or just plain old don't like or eat ice cream. Basically yes, it's a good deal ( a gallon of icecream super cheap! perhaps the "feel good" is of value?) but you might be buying something to throw away or to never use.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 11:36 am
by rich126
In my neighborhood March (the date of the original post) would have been a great time to buy since you can now flip that house for a good 20% profit. Even factoring in various costs you would have made a chunk of change. Not something I would do (too much risk) although I did take advantage of the runup to sell my place and will rent for a while as I ponder my next place to live/buy.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 11:43 am
by Brianmcg321
A good time to buy a house is if you need a place to live.

Re: Is This a Good or Bad Time to Buy a House?

Posted: Tue Sep 15, 2020 12:02 pm
by TomatoTomahto
From people I’ve spoken with, RE up to 2 hours from a major city is selling like hot cakes. Places with good internet and from which you could go to the office every week or two are making realtors giddy.

My neighbor just had competing all cash offers.