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Old 11-13-2012, 02:51 AM   #1
senttoschool
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Default Buy Home Now or Wait for Fiscal Cliff is over?

Is it better to buy a home now or wait until the fiscal cliff is over? I hear the economy might go back to a recession. Surely housing prices will drop then right?
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Old 11-13-2012, 04:56 AM   #2
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Housing prices are greatly determined by the economic condition of the area that you are in.

If you want to buy a house to live in, in an area that has good economy (like Silicon valley for instance) then sure go buy now. If you want to buy "investment property" in Florida, for gods sake no.
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Old 11-13-2012, 06:11 AM   #3
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The specter of the so-called "fiscal cliff" is just a blip in our overall march towards an uncertain economic future. The beauty of it is that neither side can afford to really let it happen, no matter how much each side postures and blusters.

So . . . we'll end up with some bastardized compromise that will make neither (political) side happy. It won't be pretty, but it won't be the armageddon-like disaster the "fiscal cliff" promises.

What I'm saying is, pay it no mind in your decision. Look rather at the long term trends, in which real estate will likely continue to be a decent sort of investment, but not as supercharged as it might have once appeared to be.

And . . . z0mb has it right about location, location, location.

Long term, we in America have a reckoning with somewhat less. In a global labor market, Joe Sixpack can no longer command $ 60/hr union wages for a job Johnny Chen can be forced to do for peanuts -- to put it all somewhat crudely.

Otoh, more people who are hungry to succeed continue to flock to America. More people means more demand for a non-renewable resource: land. So, prices for RE, long term, will continue to rise, albeit more slowly.

Cliffs: Buy.

^^^ The above is as rough cut and crudely basic an analysis as you are likely to get, but I do believe in its underlying fundamentals. One man's opinion. <shrug>
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Old 11-13-2012, 08:53 AM   #4
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If the fiscal cliff happens, your money will be worthless. Just keep living with a mind towards the future and go buy a home that you will live in for 20+ years. You cannot prevent the fiscal cliff, unless you are obama posting anonymously.
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Old 11-13-2012, 08:59 AM   #5
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Another point is that right now in many places you can buy a home for less than it's costs to build it. That's a tough price point to beat.
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Old 11-13-2012, 10:20 AM   #6
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Quote:
Originally Posted by Greenman View Post
Another point is that right now in many places you can buy a home for less than it's costs to build it. That's a tough price point to beat.
Definitely. I paid $58k for mine and the insurance company has it insured for $130k rebuild value.

If you need a place to live and are tired of paying rent then it's a decent time to buy. In most areas prices are pretty much rock bottom. They may go a bit lower but I doubt anything drastic. It's gotten so bad around here the banks aren't selling their foreclosures. They are just sitting on them. I guess they either don't want to flood the market or are waiting for the market to recover for better prices. When I was shopping there were a ton of empty houses but not many of them were actually for sale, banks didn't want to take what they are currently worth.
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Old 11-13-2012, 10:34 AM   #7
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Make sure you buy a recently built cookie cutter home in a massive sub-division with an HOA.
They are the best investment.
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Old 11-13-2012, 10:36 AM   #8
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You need a place to live, and you're going to be paying something for it. Whatever happens to housing prices, if you buy a home then the money you pay is building equity in an asset. That asset may go up or down in value, but at least it's an asset. Money that you pay in rent just goes down the drain. So I don't see why anyone would prefer to rent if they can afford to buy. There's also the security issue. In the five years before we bought our current home we were forced to move twice when landlords decided to sell properties at the termination of our leases. It was a pain in the ass. Owning means as long as you can pay nobody else can determine your future, and there's something of value in that too.
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Old 11-13-2012, 10:45 AM   #9
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Wouldn't be that worried about fiscal cliff unless I have stocks... and I sold all of mine months ago.

The cliff is only about a month and a half away, so if you want the piece of mind, I guess you could wait. Regardless, don't buy an overpriced POS in a bidding war that you think will make a good investment. Buy a home you want to live in long term that you can afford, and eff the economy et al.
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Old 11-13-2012, 10:49 AM   #10
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Housing prices have actually been on a slight rise, rates are still at historic lows. BUY. You will never see an opportunity like this ever in you lifetime.
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Old 11-13-2012, 10:49 AM   #11
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Buy when you are ready to buy. A home is a home, not an investment. Prices are low and interest rates are low. Now is probably a good time to buy. But is it a great time to buy? Who knows. Maybe you'll do well and get a nice profit. Maybe you'll lose a thousand or two. But that shouldn't matter. What matters is that you live where you enjoy (and can afford) to live.
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Old 11-13-2012, 10:54 AM   #12
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If you are inclined to believe Moody's Analytics, they gave a presentation on the national economic outlook at our state's Economic Forum last week. In it they indicated that if either the "fiscal cliff" or the debt ceiling are not addressed in time then Fitch and Moody's will both downgrade the US debt. The result would be the first stages of an economic meltdown, one effect being rising interest rates, which would push up mortgage rates into the 8% range again.
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Old 11-13-2012, 10:59 AM   #13
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Quote:
Originally Posted by spidey07 View Post
Housing prices have actually been on a slight rise, rates are still at historic lows. BUY. You will never see an opportunity like this ever in you lifetime.
This

Just buy because:
a) you are ready (by ready I mean:you have 20% downpayment and 6-9 months emergency fund)
b) you need a place to live/think long term (not investment)
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Old 11-13-2012, 11:00 AM   #14
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Another thought is that any further downturn in the economy could make it even harder to get credit, even for a mortgage. If you qualify now, mortgages are at absurdly low interests rates. I say buy.
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Old 11-13-2012, 03:47 PM   #15
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Guys, I would love to buy right now. But inventory in the SF Bay Area are at a historic low right now and prices have gone up ~20% compared to Nov of 2011. That means the houses that are in my price range (550k-600k) are now 660k to 720k suddenly.

Interest rates are low, yes, but prices have adjusted to the interest rates - making homes just as expensive or even more so.

I wish interest rates are higher because it'd cause housing prices to drop so I'm not stuck with an insanely large tax bill every single year for the next 30 years.

There have been talks of a "shadow inventory" because banks are holding up foreclosure homes and not listing them. This is causing inventory across the country(especially Bay Area) to dramatically drop in the last several months. Everywhere, including LA, Vegas, DC, Virgina, etc have seen inventory levels drop as much as 50% in the last couple of months.

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Old 11-13-2012, 04:46 PM   #16
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once we go over the cliff, inflation will hit and one of things that will keep up with the rising prices will be property value, so I vote - buy NOW
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Old 11-13-2012, 05:13 PM   #17
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How confident are you 15-30 years out?

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