# Buy a home now, or wait a while?
**URL:** https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779
**Category:** In My Humble Opinion
**Created:** [August 4, 2008, 3:59am UTC](https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779 "2008-08-04T03:59:13Z")
**Posts on this page:** 12
**Page:** 1
### Author:  [@Blunt](https://boards.straightdope.com/u/Blunt)
#### Post date: [August 4, 2008, 3:59am UTC](https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779/1 "2008-08-04T03:59:13Z")
I asked a similar question about a year ago when I was in this situation, and now I’m trying to make the same decision again. I’m trying to decide between buying a condo and renting an apartment, and my main question has to do with timing, and the market/economy now as opposed to a year or so from now. Basically, should I go ahead and buy now, or will prices continue to fall and would I get a better deal by waiting? I do intend to eventually buy a place, whether its now or in a year or two.
I don’t expect my personal financial situation to change significantly between now and then, and I’m already in a position to buy a place now if I want. I’m debt free, and have enough of a down payment to get the loan I want. I also have access to money from my family if necessary, but could proceed without that help at this point.
The kind of places I can afford now are towards the bottom of what I’d consider “acceptable”, but are still decent enough that I’d be more than willing to stay there long term. It will be more than a year or two before I can afford a really nice place I think, so even if I chose to rent for a little while, I think the places I would look to buy later would be the same I’d probably be looking at now.
Really, my big question is the direction prices are headed. Are we at the bottom yet, or are they only going to get better (from my perspective)? I’m looking in the Milwaukee metro area. Any good sources for me to research this, or any input from fellow posters?
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### Author:  [@Voyager](https://boards.straightdope.com/u/Voyager)
#### Post date: [August 4, 2008, 6:54am UTC](https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779/2 "2008-08-04T06:54:27Z")
I don’t know about your area, but take a look at the inventory of homes in your area, the number of foreclosed homes, and the average time to sell. (This last number the real estate agents aren’t publishing any more in their fliers.) Foreclosed homes are going to drag the market down, and until that inventory runs out things might continue to decline. If time on market is long, you might be able to snag a bargain. Interest rates are a bit high now, so it might pay to wait a bit until they start to go down - but when they do, you might want to move quickly.
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### Author:  [@DMark](https://boards.straightdope.com/u/DMark)
#### Post date: [August 4, 2008, 7:05am UTC](https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779/3 "2008-08-04T07:05:08Z")
I am not a real estate agent, but at least here in Las Vegas, it is most certainly a buyer’s market. Great deals to be had, and lots of motivated sellers, so you should be able to get a great place for far less than you would have paid even just a few months ago.
I would guess that after the November Election, there might be a slight surge of optimism and prices would go up a bit, but that is just a guess on my part.
My suggestion would be to take a look around and see what is out there…and you can probably find something far nicer for a monthly mortgage that would be less than rent on a place half as good.
Just my humble opinion.
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### Author:  [@DMark](https://boards.straightdope.com/u/DMark)
#### Post date: [August 4, 2008, 7:08am UTC](https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779/4 "2008-08-04T07:08:10Z")
[QUOTE=Voyager]
Interest rates are a bit high now, so it might pay to wait a bit until they start to go down - but when they do, you might want to move quickly.
[/QUOTE]
But when that lowering of rates does happen, and **Blunt** already owns a place, it wouldn’t take much to get a re-finance to the lower rate, especially with their good credit.
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### Author:  [@Trunk](https://boards.straightdope.com/u/Trunk)
#### Post date: [August 4, 2008, 11:43am UTC](https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779/5 "2008-08-04T11:43:32Z")
The NORMAL problem with waiting is that you’ll miss out on gains (get priced out).
That risk is GONE.
Houses have traditionally appreciated at about 2% above inflation. With the lessons current in our minds, and credit the way it is, I bet we won’t even see that much appreciation for 10 years.
You’re not going to lose out by waiting (many markets have roughly 12 months housing supply, and more piling up behind that).
And, keep in mind that prices falling 30% in a market where they rose 100% doesn’t automatically make it a “buyers market”. We’re still at a place – historicall – where home prices are high compared to wages, and more people “own” a house than ever have before – and more than probably should.
I’d wait. Let it shake itself out. See if inventory piles up. See how desperate sellers can really get. Even if you miss the bottom, you’re not going to see appreciation like we saw from 2000-2006. The lenders won’t allow it to happen again for a long time.
Link from today. . .
> **[Housing Lenders Fear Bigger Wave of Loan Defaults (Published 2008)](https://www.nytimes.com/2008/08/04/business/04lend.html)**
>
> Homeowners with good credit are falling behind on their payments in growing numbers, just as the problems with subprime mortgages are leveling off.
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### Author:  [@Dinsdale](https://boards.straightdope.com/u/Dinsdale)
#### Post date: [August 4, 2008, 1:30pm UTC](https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779/6 "2008-08-04T13:30:52Z")
If you wait a year, then you will lose a year of living in your new home. Just wanted to add that your home is something other than an investment.
No one can predict the future. In horribly general terms - I don’t see prices rising too soon, nor am I certain prices can drop all that much further. But my gut tells me that we could likely see a whole new round of foreclosures coming up. Not the predatory lending/ignorant borrowing ones, but more the folk who were cutting it a little too close and then could no longer make ends meet in this stagnant economy. So I certainly don’t think there is any hurry to buy.
But it IS a buyer’s market. And you are in optimal position - moving from renting to buying. So I see no compelling reason to wait just in the hopes of saving a modest amount a year from now. Start looking, be REALLY picky, and if something really appeals to you, see what a lowball offer might get you.
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### Author:  [@control-z](https://boards.straightdope.com/u/control-z)
#### Post date: [August 4, 2008, 4:50pm UTC](https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779/7 "2008-08-04T16:50:56Z")
You’re in a good position being able to buy right now without needing to sell an existing home.
I don’t think prices have reached bottom quite yet, but regardless you’re definitely better off buying than paying somebody rent. Plus you can claim mortgage interest on your tax return. What I’d do right now is find somewhere that’s close to or a little more than you can afford, and make a low-ball offer. If the place lists for $175,000 and you don’t think there’s any action going on, offer $145,000. What do you have to lose?
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### Author:  [@Digital\_Stimulus](https://boards.straightdope.com/u/Digital_Stimulus)
#### Post date: [August 4, 2008, 5:06pm UTC](https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779/8 "2008-08-04T17:06:22Z")
[QUOTE=Dinsdale]
…But my gut tells me that we could likely see a whole new round of foreclosures coming up. Not the predatory lending/ignorant borrowing ones, but more the folk who were cutting it a little too close and then could no longer make ends meet in this stagnant economy.
[/QUOTE]
From today’s NYTimes: [Housing Lenders Fear Bigger Wave of Loan Defaults](http://www.nytimes.com/2008/08/04/business/04lend.html?em) (login required?), supporting your gut.
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### Author:  [@Giraffe](https://boards.straightdope.com/u/Giraffe)
#### Post date: [August 4, 2008, 5:06pm UTC](https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779/9 "2008-08-04T17:06:58Z")
From a purely financial perspective, I’d probably wait, for all the reasons that **Trunk** points out. This real estate mess is far from over, and even when it is, you’re going to see far slower growth than you did during the boom. With both tons of inventory and tons of uncertainty, waiting is likely to pay off.
The funny thing is, despite having offered this type of advice for the past couple of years, we’re actually closing on a house this week. We found one we liked that we can (sort of) afford and decided to go for it. I fully expect that prices in our neighborhood will probably be lower a year or two from now, but we’re planning to stay here long term so it’ll work out. Plus, the non-remote parts of the Bay Area have a bit stronger real estate market than other parts of the country due to geographical constraints and the number of people who have well-paying jobs in Silicon Valley. And most of all, for us the intangibles of owning (e.g. the ability to make improvements) outweigh the need to get the absolute lowest price. However, to buy now, I think you have to be braced to see prices continue to go down and not get upset.
If there’s any chance you’ll want to move in the next five years, definitely don’t buy.
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### Author:  [@Eva\_Luna](https://boards.straightdope.com/u/Eva_Luna)
#### Post date: [August 4, 2008, 5:20pm UTC](https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779/10 "2008-08-04T17:20:30Z")
A friend of mine is in this situation, and has just had his second kid, no less. He is one of the most finance-smart people I know (he’s a fund manager). Much to his wife’s chagrin (they now have to deal with a 15-month-old and a newborn, in a third-floor apartment), he plans to wait a year before buying.
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### Author:  [@Voyager](https://boards.straightdope.com/u/Voyager)
#### Post date: [August 4, 2008, 7:25pm UTC](https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779/11 "2008-08-04T19:25:57Z")
[QUOTE=DMark]
But when that lowering of rates does happen, and **Blunt** already owns a place, it wouldn’t take much to get a re-finance to the lower rate, especially with their good credit.
[/QUOTE]
That’s true, but the interest rate change is more an indicator of when people will start flocking back to the market than the time to get the optimal loan. I lucked into this once. I had a house in grad school, thanks to my wife who was working. We sold it just as the interest rates soared in 1980, and wound up financing the guy at 10.5% interest with a clause that he had to refinance when rates dropped below that.. We immediately bought once he did this, and the drop in rates was a signal that the bottom of the market had been reached, so we wound up doing very well.
Interest rates did drop more after this, and we did refinance, but housing prices went up after we bought.
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### Author:  [@Duckster](https://boards.straightdope.com/u/Duckster)
#### Post date: [August 4, 2008, 7:52pm UTC](https://boards.straightdope.com/t/buy-a-home-now-or-wait-a-while/458779/12 "2008-08-04T19:52:21Z")
[QUOTE=Blunt]
I don’t expect my personal financial situation to change significantly between now and then, and I’m already in a position to buy a place now if I want. I’m debt free, and have enough of a down payment to get the loan I want. I also have access to money from my family if necessary, but could proceed without that help at this point.
[/QUOTE]
Have approached a potential lender and asked for a prequalification quote? Just because you are debt free and have enough for a down payment does not mean you can get a loan _in your area in this lending climate_.