5 votes

Good time to buy a house?

Hi,

I am looking to buy (put a big down payment down) for a house within the next 1-3 years or so. I'm in the state of WA, and i'm currently looking in the Everett / Snohomish / Millcreek area.

Note that this would be my first home. I don't have any debt. I have a decent income.

Question: Should I wait for a dip (it seems almost imminent these days) or should I buy now? I keep hearing that the area i'm looking at is going through a growth period (i.e. new houses being built, real estate is going up on a monthly basis, big companies within the area are hiring).

Thanks for your thoughts.

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The American situation is

The American situation is very different to that facing individual European countries. We have a central bank of our own, and it is likely to print rather than take "haircuts" off of our deposits.

If they continue to print, home prices will go up, if instead they start confiscating cash, home prices will drop. There are other factors, like the availability of FHA/USDA loans, and continued mortgage backed security buying by the Fed, but what matters most is the currency supply.

What you do is up to you. No one can truly know what the Fed has in store for us.

A "Big" Downpayment

...might be enough to pay for the entire house several years from now. Just don't keep all your savings in the same bank. Actually, Cyprus shows us savings might not be safe in any bank, it can't hurt to do some "mattress stuffing".

I'm a Realtor

Every market is different. I'd recommend starting to watch prices now, so you can recognize a bargain when the time comes. Also, start watching the supply and demand data. This would be housing supply and absorption rate, which is how quickly homes are selling. Not every market is hot right now. In particular, some builders overbuilt in certain areas and so you might get a better deal there.

Personally, I wouldn't put down anymore than I had to. IMO, the housing market (in most places) is still pretty volatile and if you need to short sell the home you may be glad you didn't put everything you had into the downpayment.

I'm a homeowner. I paid for

I'm a homeowner. I paid for my current house with a very big down payment - 100%. I.e., I paid cash for my house. I will never have to worry about a short sale because there is no mortgage on my house. I am well aware that interest rates are now so low that you almost feel like a fool if you *don't* take out a big mortgage. After all, in 20 or 30 years inflation is bound to be higher than the 4% or so rate on your mortgage, so you'll be paying the loan back with money worth less than you borrowed, even after interest charges are included. But keep in mind, tiny down payments of 5% or so combined with big, low interest mortgages are the very thing that brought about the mortgage crisis in the first place. That is precisely the toxic brew that encourages people to pay too much for more house than they really need. With a tiny correction in property values people realize they owe the bank more than their house is worth. So they're more inclined to walk away and send their bank jingle mail. You wind up with more banks needing bailouts, as they can't sell their foreclosed houses for what was owed in the mortgage. Indeed, the fact that government is trying to resurrect the property markets by encouraging the very policies that caused the crash in the first place makes me very pessimistic about our future. Politicians and the public have learned nothing.

I am in my middle 50s. Had I spent my life eating taxpayers' dollars as a public employee I'd be able to retire with a fat pension right now. But I have worked in the private sector all my life, where defined benefit pensions are reserved for CEOs and CFOs and 401ks are a sick joke -- after 30 years I'm lucky if the nominal value of my 401k is worth the cash I put into it -- projections that assume a 7% annual rate of growth over 30 years are laughable. So what I know is this -- if I am ever to have any hope of retirement I must not have any mortgage payment to make. It is hard enough for someone on a retirement income to pay property taxes and utilities, even without a mortgage payment. Debt is seductive. It is also very dangerous.

Absolutely, with inflation as

Absolutely, with inflation as it is, and the economy, you want to put down as little money as possible when buying your house. If things go wrong, you wont be out much.

Save the money, get a FHA/USDA. I'd be buying food and water, and then gold and silver.

Try to search for..

foreclosures.There are a lot of them around right now,so it shouldn't be hard to find one.Most banks will help you out with info on them.Some banks will list them on their website.You can get a lot better deal that way.And the most important thing to remember......the realtor works for commission,not for you.They don't care how bad you come out as long as they get their commission.Myself & my sister got stung by bad realtors & several other people have told me nightmare stories.DON'T TRUST THE REALTOR!!!Research everything & make sure you know what you're signing & what you're looking at!

Aww, we're not all bad :(

I'm a realtor, so is my husband. We have a family run agency in a small rural town and we work very hard for our clients and care about them as people. I know a lot of agents get a bad rap (most times deservedly so), but there are some good ones out there. Not so much in larger towns and cities, they're almost always scheming, money-chasing shitheads. :)

I'm reaching up and reaching out.
I'm reaching for the random or what ever will bewilder me.
And following our will and wind we may just go where no one's been.
We'll ride the spiral to the end and may just go where no one's been.
Spiral out.

Buy Now

This goes for everyone.. Real estate is going to be another bubble this year. I'm thinking a spec home myself..

Borrow only what you can liquidate in 2 weeks.

This was J Peirpont's testimoney to Congress.

If one wants to work to pay mortgage that's fine.

If one must work to pay their mortgage then they are indentured servants to some degree.

Shiller's Long Term Home Price Index
http://pricedingold.com/us-home-prices/

Free includes debt-free!

i would buy a forclosed

i would buy a forclosed property...fix it up, if necessary, and live in it. with low interest rates the mortgage will be absurdly cheap.

if the price is low enough, pay it off in one shot and be done with it.. (if that option is available to you).

The slogan press on has solved and always will solve the problems of the human race. No person was ever honored for what he received. Honor has been the reward for what he gave.

- Calvin Coolidge

I would buy now

I would buy now, interest rates will never be lower. So the cost to borrow is very low. Im not sure if we are nearing the bottom of the market or not, but if you intend to be in the house for a long time then it really doesnt matter.

Save up and buy after this.

http://www.dailypaul.com/278669/999-probablility-of-total-an...

if you believe it's going to happen.

You'll get more for your buck if it does.

However 'this' means that the 'buck' is worthless.

I have 15 pounds of pre-82 copper pennies.

Pack in 1904 a dozen eggs was 8 cents. A dozen dozen was 1 silver dollar.

Today a Silver Dollar buys a dozen dozen for $2.08doz.

Paper money has always proven itself to be the promise of dead men that never pays out in the end.

Free includes debt-free!

I will give you a bump

for discussion.

Considering what is happening, I would consider a home on wheels. If you lose employment or an area becomes depressed you can move to another area of the country and still have a place to live. If nothing happens you have something to use for vacations.

During the great Depression people were on the move trying to find areas that were still prosperous. I used to think owning a home was important but it is getting hard to sell them and maintain them.

Maybe, just buy a lot that you could park your RV on and raise a garden of vegetable or chickens. If you lose your lot the loss would not be as great as if it was a home on it.

Plus, we don't know what the bad guys have in mind in the way of property taxes. I have seen people lose their homes and still be responsible for the taxes on it even when the banksters took it over.

The banksters were very slow in changing the title so the homeowner was still responsible for the taxes and in the mean time the houses were vandalized and run down, what a mess.

Prepare & Share the Message of Freedom through Positive-Peaceful-Activism.

Yep....

Go RV. Get out, explore. Don't tie yourself down any where. Everything is too unpredictable you might have to fly.

I've tried the RV live once it was fun. I'd like to do it again. One thing I learned about it tho, was if ya really want to see the country, is, pick a destination, go there, check it out. If ya want to stay for a spell, get a job, stay for at least 6 to 9 months and move on to the next place ya wanna see.

Key is, don't just keep movin. stop once in a while, settle down and tune in to the places you've always wanted to see.....

Because: Some animals are more equal than other animals. -Animal Farm-

What the? > http://www.youtube.com/watch?v=6MTIwY3_-ks

Michael Nystrom's picture

Buy a duplex when you do

Let your tenant pay off your mortgage. In a year or two, you can even move out and rent both units out. And then do it again, and again, and again and ...

Want to get a leg up on life?

Build a cob house!

There is a big cob house boom in the pacific northwest right now.

Cost is minimal, house will last for hundreds of years.

http://www.youtube.com/watch?v=zkv7_wSkUXE

IMO no it's going to crash

IMO no it's going to crash again much bigger then 2008 most people are upside down in their mortgages, and they are running out of options in hiding those derivatives in the markets. The current so called growth is just an illusion another bubble. That's hat these people do they blow up these illusionary bubbles and use them to steal the wealth of the people. Who ends up with all these properties when the bubble burst? The banks of course and rinse and repeat...

You'd be better off taking the next few years and buy some land free and clear or a very small private mortgage with the seller not through a bank and building a house as you go. Put an older mobile home on it while you build and when you are done have no mortgage or debt. etc.

-----
End The Fat
70 pounds lost and counting! Get in shape for the revolution!

Get Prepared!

Build an earthship !

http://earthship.com/

"Its easier to fool people than to convince them that they have been fooled."
Mark Twain

I still have some concerns

I still have some concerns about those earthship homes. I wonder about the effects of breathing those tire fumes.

“Let it not be said that no one cared, that no one objected once it’s realized that our liberties and wealth are in jeopardy.”
― Ron Paul

You seem to be asking us to

You seem to be asking us to predict whether your house price is going to go up or down, which I don't think any of us is capable of doing. Bernanke has a policy of keeping interests rates at absurdly low levels, and that may be the principle reason why house prices have started to go back up -- most people buy with mortgages, so low rates translate directly into low payments. Certainly most people buying today would not be doing so if interest rates were where they were when I bought my first house -- 8.6%. So, things that will make house prices go down:

1. A rise in interest rates, despite the massive monetization of debt by the Fed.

2. Another crash in the economy.

Things that will make house prices go up:

1. Continuing low interest rates. Japan has shown that this can go on for a long, long time.

2. If the money printing by the Fed, already inflating the stock market, starts causing serious inflation in other prices, including houses.

As for which of these factors wins out, your guess is as good as mine. Of course house prices will go up or down for the usual local reasons as well -- employment prospects in the area, good public schools or bad ones, greater crime or less, etc.

In my view you should only buy a house if you really want to live somewhere for a long period of time, can readily afford it, and aren't going to be worried about year to year fluctuations in the price.

One criterion is important

Are you going to raise a family in the place? If so, don't worry about timing dips.

If you're asking whether people know about the market's future, the answer is all of them.