Does anyone know how long the market for homes is going to stay this low for?

Question

My hubby and I were recently looking to purchase a home. But realized that we want to save more money to get a better home plus not feel rushed to purchase because the market is so low. Our time line to purchase a home will be this time next year. Do you think the market will still be like this? Please give information, links and resources if you have them available. Thanks in advance!

Answer 1

I don’t have the ability to link to my crystal ball, sorry.  

Answer 2

If there were really some way to actually see the market value of a particular house on a particular street exactly to the dollar, I think it would show that values go up and down every day.  When the seller feels a little depressed then he may sell lower, if he just got good news he may hold out for more money.

The interest rates going up a little may motivate more people to make a decision and cause more buyers to move into the market place, a mortgage company going broke may scare buyers out of the market place.

An elementary school getting a real good rating or a fire or police department getting a good rating may cause things to move up.

I hope you will notice these things generally effect specific areas much more than the country as a whole.

If market values stay exactly the same and interest rates go up by one percentage point that will raise your house payment by about $65 a month for every $100,000. That is about like the price going up by 11% in that year.

Timing a market is impossible.  I would spend this next few months looking at neighborhoods and get a sense of why some are more valuable than others.  Look at homes and see what you will be happy with.  And plan on keeping the house you buy for at least 10 years.  That way you will be ok.

Glenn

Answer 3

Any predictions about next year's market is an opinion.  There are plenty of opinions out there on what is going to be happening to the market next week, next month, next year - but what actually happens could be drastically different.

Another factor you should be considering besides the housing market is the lending market.  While you are waiting, interest rates are creeping up.  

I don't know why you would feel rushed to purchase, there is a ton of inventory, most buyers are taking their time and looking at alot of property.  

In my area, home sales are picking up because people are trying to take advantage of the current market conditions.  While median price has still fallen, sales have been improving.  See yahoo real estate's July 2008 sales report article.  

Answer 4

Prices are still in decline. Expect less than a full recovery even by this time next year.

No one can say for sure what will happen and real estate is so local that different markets will recovery at different times.

As with every market, it is difficult to time the bottom. Most who try will miss. Prices will appear to be declining until they start rising again.

It could get worse before it gets better. Especially if Obama gets elected. Brace yourselves.