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April 24, 2008


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I'm not sure what your plans are, FMF, but you may wish to wait until late summer/early fall; all of the indicators I've seen are showing the buying "sweet spot" (lowest price against greatest selection) will hit around August/September. You might save a few bucks or get something a little closer to your ideal property in just a few months.

I agree with Rod.. we haven't seen the bottom yet!

We are also considering moving this summer instead of next summer like we planned. We have 2 vacations already in the works next year so we're thinking it might be easier to move this year. Of course, selling our house might be a different story.

Wife and I are saving for a downpayment. We plan to buy in 2010 with 20-30% down. I don't see any realistic uptick in prices before then, with inventories where they are (simple supply/demand).

The popping of this housing bubble is leaving a very bad taste in many people's mouth. I don't think price increases will occur for a couple of years, and when then do it will be slower than last time. A lot of us are waiting for two consecutive quarters of appreciation before jumping in.

Don't wait too long to buy; there will be a point where sellers would rather keep the property in the hopes of riding out the downturn which will decrease the amount of "quality" properties available.

I agree the bottom is not here yet. But is it worth it to wait and wait to hit such a moving target? Its like reading the Yahoo finance forms, every one is speculating that "This is the bottom!" like they can control anything. The bottom line, any time in the next 5 years is a good time to buy, so find what works best for you and grab it!

Side question, what is it like trying to close a mortgage right now? A "cheap" house is nothing if you can't even get a loan to cover it.

Chris --

I have enough for a good downpayment event without selling my current house (which I own outright), so I'm not anticipating any problems. That said, I guess we'll see when we get there. ;-)

The bottom line is that in many parts of the country, the median house is unaffordable to most everyone but six-figure income earners. So, rather than waiting for "the bottom," just buy when mortgages are comparable to rents and when you aren't spending more than 30% of your gross on housing. Some places in the country are already there, and some have a long, long way to go.

Trying to time the market is the same mistake that many flippers made in the first place--at best it is a gamble and at worst a loser's proposition. Prices have gone down dramatically in some areas, less dramatically in others. And, good neighborhoods are always somewhat insulated from huge swings down.

Instead of trying to time the market I'd suggest trying to find the perfect house that fits your needs at a price you feel comfortable with based on your expenses, earnings and future requirements. Common sense and not very exciting but this philosophy will help your focus regardless of the current market trends.

D --

I agree with the basic premise of what you're saying. We're obviously covering the basics -- getting a house we like, one we can afford, etc. -- we're just looking to get it at a good price.

And while I also agree that timing the market isn't a worthwhile strategy for stocks, there is a bit of timing that can be done with real estate in a prolonged slump. No, we probably won't buy at the bottom, but we will get a good house for much cheaper than what it would have cost us 5 years ago. And if we stay in it for 5-10 years, it should be a good investment as well.

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