Buying a house: 5 reasons to do it now, and 5 reasons to wait

Full story: Chicago Tribune

Housing students, which of the following is correct? Buy a home now -- you'll get a great deal.
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1 - 20 of 25 Comments Last updated May 23, 2009
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Ralph Jolly

Schaumburg, IL

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#1
May 10, 2009
 
Contradictory opinions yes, contradictory data no -the data is downright abysmal and anyone who tells you otherwise is dishonest.

Surprise, surprise the realty industry thinks we may have hit a bottom and this is a golden opportunity to buy.
Now how much money could you have lost listening to these people over the last few years???

The housing market is abysmal -the small uptick in activity is purely seasonal.
While this article tries to appear to be even handed, it is yet another advertising piece for the realtors.

Still no danger of any realism at the Trib???
Justsayno

Corning, CA

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#2
May 10, 2009
 
Ralph Jolly wrote:
Contradictory opinions yes, contradictory data no -the data is downright abysmal and anyone who tells you otherwise is dishonest.
Surprise, surprise the realty industry thinks we may have hit a bottom and this is a golden opportunity to buy.
Now how much money could you have lost listening to these people over the last few years???
The housing market is abysmal -the small uptick in activity is purely seasonal.
While this article tries to appear to be even handed, it is yet another advertising piece for the realtors.
Still no danger of any realism at the Trib???
You're absolutely right RJ. When the bottom comes, which is not now, there won't be any need for someone to rush out and buy a house; prices are going to stay down for quite some time to come.

With the 'easy money' loans taken out of the market the bottom has to come down to what people can actually afford to pay using one third of their monthly income. They will also need a steady job, good credit score and some skin in the game in the form of a down payment. And, if it's not a 20% down payment, then their payment is going to include a hefty monthly PMI payment as well. The PMI payment is likely to continue for quite some time as values are not likely to rise any time soon to allow the removal of PMI from the payment(usually after a 20% equity stake is achieved).

Also; yet to come is a TRILLION PLUS dollars in loan 'resets' from 2009-2011 which is a number equal to what has already transpired with sub-prime loans from 2007-2009. Defaults on some portion of 2.5 TRILLION dollars of consumer debt along with Commercial RE defaults with the Second largest Mall owner in the U.S. already seeking bankruptcy protection.

So five reasons NOT to buy a home are:

1. More unemployment
2. More foreclosures.
3. Falling prices.
4. More defaults
5. Wash, rinse, repeat.
OrlandoGuy

Orlando, FL

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#3
May 15, 2009
 
I wouldn't buy a regular home here in Orlando just yet. What I mean is a home not in foreclosure or distressed. I have read that many of those regular properties have much further to fall as far as prices. These homes still are not priced correctly for the wages in this area.
Tim

Mc Lean, VA

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#4
May 15, 2009
 
Do not forget about taxes and insurance, here in Florida you may get a foreclosure for $139,000 but you are still going to pay the prior tax rate on the value it was before the crash, insurance is not declining either.
Not So Fast

Longwood, FL

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#5
May 15, 2009
 
5 Reasons NOT to buy a house now

1. You may not have a job by the end of year, let alone month or quarter to pay the mortgage and other bills.
2. You may have to move out of town, out of state, or out of country to get a job to pay the mortgage and other bills.
3. You may not have enough to put a 20% down payment.
4. You may not qualify for a bank loan?
5. That foreclosure house that has a nice low price will take tens of thousands of dollars to repair and upgrade after it has been trashed and looted.
NoSurprise

Alpharetta, GA

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#6
May 15, 2009
 
Last year when everyone was touting, "its bottom, buy now or lose out on the best prices" some people in my neighborhood did..an example the house across the street. During the boom could have fetched 800K..sold last year at 615K..a bargain..nope..Now that same home is valued at 500K..seems to be the time to jump in is when home prices start to creep back up at the right rate of 2-3% a year..then its time to buy..much better than taking a 20% hit!
Stephen

Clay City, KY

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#7
May 16, 2009
 
I think that the wild ride is over. Housing when it recovers will move side ways for a number of years and then may start to appreciate at the rate of inflation. No reason to buy unless you need shelter and prefer to own rather than rent.
the best

Fort Smith, AR

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#8
May 16, 2009
 
reason to buy; you can't get a bank to loan you 200 grand to throw down a rathole.
juan

Mountain View, CA

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#9
May 16, 2009
 
also after you buy that house that you cannot afford go and get some credit cards and charge them to the limit because you can,,, therfore we can all continue the mindless spending habits of the last 30 years,, and continue the dumbing down of america,, by the way does anyone see a correlation between increased immigration illegal and legal and the aformentioned dumbing down of america?
DAS

Fort Lauderdale, FL

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#10
May 16, 2009
 
Don't buy nothing till after 2012....Dec 21st...Trust Me...Unless you have a BIG BIG YACHT to get to that HOUSE
DAS

Fort Lauderdale, FL

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#11
May 16, 2009
 
the best wrote:
reason to buy; you can't get a bank to loan you 200 grand to throw down a rathole.
You Got it........
DAS

Fort Lauderdale, FL

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#12
May 16, 2009
 
Tim wrote:
Do not forget about taxes and insurance, here in Florida you may get a foreclosure for $139,000 but you are still going to pay the prior tax rate on the value it was before the crash, insurance is not declining either.
Yea Buy it for 139 and in 2012 it will be wrothless is not sooner........Open up Your EYES
ubinmyshorts

AOL

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#13
May 16, 2009
 
IM SO CONFUSED
sumsum

Shreveport, LA

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#14
May 16, 2009
 
We just bought and we are doing fine.
Ralph Jolly

United States

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#15
May 16, 2009
 
"We just bought and we are doing fine."
So glad to hear from you sumsum. I am over the moon to hear your news.
Me, I'm doing fine. Don't worry about forgetting to ask...
Janice

Seattle, WA

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#16
May 16, 2009
 
Now is the time to buy if you need a home and your job is reasonably secure. It is time to go back to the way things used to be - a hone purchase is supposed to be for years to come, otherwise it would be called a lease. Prices are low, inventory is up and homes are under valued as they were over valued 5 years ago and there is the $8,000 tax credit to boot. Maybe prices will continue to drop, maybe not. They are already pretty low already and you will definitely get more home for your dollar than 5 years ago. Bank standards are high in contrast to the 'if you have a pulse' standards of years before. The pendulum has swung to an extreme and will eventually correct itself to allow people capable and mature enough to handle a mortgage and all the other expenses in while giving hopefuls something to work toward. Home ownership is a marriage and better entered into for the long haul. If you're only dating - continue renting - absolutely nothing wrong with a lease.
zippythepinhead

Newell, PA

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#17
May 17, 2009
 
...it's a push, with a slight edge to waiting 2-3 yrs....
Huh

Saint Cloud, FL

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#18
May 17, 2009
 
I know 3 people who are over extended and have either filed bankruptcy or are going to and all 3 are still in there house (the bank hasn't gotten it back yet). I aslo talked to a foreclosure attorney who doesn't list, he just processes the foreclosure. He said wait with emphasis on WAIT ! The volume of foreclosures has no sign of ending. I'm going to reevaluate every year at a risk of missing the bottom. Had I bought another home when they said it hit bottom last year, I would have lost 30% in value. Protect the downside...quote from Donal Trump.
Truth

AOL

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#19
May 20, 2009
 
Another reason to refrain from buying; Karl Marx is still foul and hostile and hard towards society.

Property rents (taxes) are still in effect, even after you pay for the house, it will never be yours, and Marx is holding up a big blunt heavy iron fist and is just waiting to let it down with a bone pulverizing crash on anyone who is unable to pay their rents.
Mr X

Pittsburgh, PA

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#20
May 23, 2009
 
NoSurprise wrote:
Last year when everyone was touting, "its bottom, buy now or lose out on the best prices" some people in my neighborhood did..an example the house across the street. During the boom could have fetched 800K..sold last year at 615K..a bargain..nope..Now that same home is valued at 500K..seems to be the time to jump in is when home prices start to creep back up at the right rate of 2-3% a year..then its time to buy..much better than taking a 20% hit!
Totally agree - WAIT for prices to STOP FALLING for atleast 6 MONTHS ( better 9 months ) BEFORE you BUY. In those 6-9 months - believe me, PRICES AINT GOING ANYWHERE - mainly because of UNEMPLOYMENT, OVERSUPPLY, RUINED personal FINANCES and SANE LENDING. It will be a LONG TIME before people start GAMBLING on HOUSES AGAIN.

This is a big country - not like Japan or some European countries. The way people act while buying a house is that this country is RUNNING out OF LAND.

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