Right now could not be a better time to buy a home! The primary difference is right now in the state of Colorado we are not "down" we are just slower than the last 5 years that have been historically high! It’s really all the "bad press" that you hear daily which suggests things are bad. If I told you several times a day that you look sick - and I continued to tell you that day after day – eventually you would start to actually feel sick! What's going on in Colorado real estate right now is just simply symptoms of the above. Most of the issues are not reality based for our regions true statistics. Based on 10 year averages we are just slightly behind the curve for average amounts of sales. With interest rates still at 30-40 year historic lows, buying a home right now is a great deal. You will be able to take advantage of the folks feeling "sick" and who will be happy to "sell with out much of a challenge to your offer – since they have accepted that things are bad! Investors should be scooping up all these cheap houses on the market. The final and most important reason to buy now is – prices have been flat for several years in our area – if you buy now, you will be in a position to ride the real estate wave back up - instead of waiting until you read "good things" in the media reports again – by then it will be too late to capture a great equity position in the near future by purchasing a home right now! I think real money is to be maid in buying houses cheap right now or investing with a smaller builder on a specific project.

Someone here posted that he believes we'll post double digit inflation in our future and it goes without saying, this is the sad truth. Currently the dollar is dropping in value. Our currency is not backed by a standard, so the fact that our government is going to print more money in order to accommodate the bail out plans will push our inflation through the roof. This is without mentioning how much of an impact our current unemployment rates will have on the market. Unfortunately I see them rising to about 7-8%. I still think housing prices need to drop around 20-30% to get them into realistic value, but there are arguments for both sides. As I'm writing this, Wachovia's stock is now dropping. Belief of a buyout talk with Citigroup has begun and Citigroups stocks posted a 5% growth. I'm starting to ramble...

I don't know if we are at a bottom or not, no one does. There is no way to really tell if we are at the bottom, half way down or oscillating prior to an increase or further drop. But, we are reaching an interesting point where buyers aren't willing to pay more and sellers aren't willing to take less. It is of course an unstable point but it gives an artificial point of view to many who should know better. Rent demand is going up and as landlords can, they will raise rents to maximize their profits given the rising demand. Because of the tightening credit markets, rental demand will not decrease any time soon. What's more the anticipated increases are stronger in multifamily than in houses. This has happened before but usually they run close to parallel and often landlords holding houses are able to increase rents faster than apartment landlords. That is not the case now and will not be the case for the foreseeable future. Much of it has to do with the different demographics between apartment and house dwellers. But, that is for another discussion. As I said, earlier, I don't know if we are the bottom in relation to the residential housing market. It sure doesn't feel like it and that is the reason I am holding onto my SFH through quads even though I'd "like" to sell but not at the prices the current market demands. There is no pressure for me to sell and they all have positive cash flows. However, I am not adding to those holdings. I am adding to my multifamily holdings - aggressively. The lesson many in all markets have to learn over and over again is trying to call the bottom is foolish and dangerous, you will almost certainly call it wrong. I can guarantee you this, two years from now, I will be able to tell you to the day when the bottom happened. I can also guarantee that by buying based on cash flows anyone buying now will do fine. :cool:

Barbara, I've been really trying the leasing angle but I've run into too many landlords that haven't dropped their rents to a level that the property will earn my share. I've been looking at commercial retail property though. I'm not so sure any of these landlords will return my loyalty either. Any tricks for beating down landlords on prices when times are tough?

Why buy now? Even if prices have hit bottom in your area, you are not going to see an upswing in values for several years. So now you are holding, which is good as long as the property is cashflowing. However, if all you are getting is cashflow, why not use long-term leases to control the property? Buying has any number of downside risks which leasing will avoid. When the market starts to move again, you are in prime position to buy the property -- with owner financing -- from the owner that you have been faithfully paying on time. And for the record, we havent seen bottom yet. Strap yourselves in boys. Its going to be a wild ride. Barbara

According to Case/schills it looks like Q2 of 2006 was a peak for much of the country.

Hi, The MA market is still has a way to go. The Boston condo market is fairly solid, price wise, because most owners have the insurance of being able to rent the properties for high rents.

If the bottom is here why not buy now?

Jason Hanson

Real Estate Coach · Oakton, VA · Member since 2008 · 695 posts · 43 votes

If the bottom is here why not buy now?

47 Replies