Have home prices in Corona, CA bottomed out/get any lower? What about the interest rates?

Question

I'm a 22 year old college grad and with the financial support of my parents, I'm looking into buying a home in Corona, CA. The only dilemma is I hear conflicting opinons of whether house prices will continue to decline. Some say wait till October, the end of the year, or second quarter of 2009?! I would appreciate some advice and also any word if the Federal Reserve will increase the interest rates? additionally, if you would recommend any reading/websites to become more savvy about purchasing homes, I'd appreciate it. Thanks a million!

Answer 1

The foreclosure problem is just now hitting the Alt-A market and it will be the middle of next year before the prime mortgage interest rate resets peak.  Foreclosures are no longer just among those with poor credit who never should have bought a house to begin with -- it is spreading into those with good credit ratings.  Prices could easily continue to drop for another year or two.  Meanwhile, inflation is increasing and the Fed faces little choice but to start increasing interest rates by fall.

Tough choice.  Wait for the market to bottom and start coming up again, but at higher interest costs and more stringent lending practices, or try to find something priced well below current market (e.g. foreclosure) and try to find a mortgage.

Where is your job and how far are you going to have to commute from Corona?

Answer 2

Prices going lower. Interest rates getting higher. Read the Wall Street Journal. /

Answer 3

Dear College Grad :-)

Congratulations!  You're very lucky to have parents that are willing to help you!  With today's broken families, you're lucky to even have a family!

First, regarding interest rates, there's no one who can tell if rates are going up, down or sideways; not even Bernanke.  But, with the economy tanking, and the real estate market in a tailspin, it's unlikely that the Fed will raise interest rates this year; were it not for rising inflation (especially energy, oil, gasoline and food), they might have lowered them again this year!

Regarding the purchase of a home in Corona, keep in mind that a home is not an "investment."  It's a place to enjoy your life, lifestyle, family, etc.; it's kind of a "savings plan" because, at least, you get to keep your rent money for your future retirement, but that's about it, unless you're a landlord, and have renters paying off your properties.

When you should buy depends on your personal circumstances.  If you're living at home, and not paying rent, then I think that you can wait a bit longer, perhaps until the end of the year.  However, if you're currently paying rent, now is probably a good time to get in, and buy a "fire sale."  However, make sure that you don't pay too much now because, otherwise, it will take you longer to come out ahead financially.  But, think long term; that's what a "housing investment" is all about.

Depending on your circumstances, and goals, I would suggest that you take a look at the Four Seasons community development off of McKinley and Indiana.  Four Seasons is a master planned community with about 400 new looking homes.  They have 2 parks, a recreation center, a pool, a jacuzzi, a basketball court, and 2 tennis courts, and the monthly home owner's association is only $73 per month!  It's a safe, beautiful, and inexpensive community, and a great bargain!  

Of course, "value" is what you should be looking at.  In other words, what are you getting for your money?  Don't go for "s**y," (e.g., Corvette, Ferrari, etc.) because they only make it "s**y" to get your money!  Go for practical value.  What are you getting for your money, and is it worth it to you over the long term?

If you're interested, sign up for www.Trulia.com; they're a great real estate website  :-)

Good luck!  It takes time, effort, energy and financial investment to make money, and it sounds like you have all of those working on your side!

Ed  :-)