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closetohumping

Is it wise to buy a home right now?

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I think there's a lot of uncertainty.  Interest rates are low, but could rise.  We are in a recession, Corona or not, so could housing prices dip later this year?  I know with everythign up in the air, it's hard to make a judgement, but paying rent another year is just throwing money away.  Could housing prices drop 30% ?

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In my opinion, there are two key considerations. First, how sure are you that you will be able to pay your mortgage in the future? Are your jobs safe in a recession?

Second, there is a real question about whether asset prices, including housing, will drop significantly in the future as a result of what is happening right now. It all depends on how bad this outbreak will be. Right now no one really knows but it does seem like we are headed for a pretty bad recession. In that scenario housing prices should drop. How much and for how long is unclear, and of course real estate is a local market.

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Well I am having to relocate across the country for work and lets just say that its a bit stressful.

 

My job is fairly recession proof as a tenure track academic. Picked a location that has stable property values and essentially have to hope for the best.

Best part is that the steadied drop in interest rates are helping some, but at some point it hits diminishing returns.

Bigger concern is about paid movers... if we do go to some form of lockdown, how the fuck is that going to work?

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Cross posting here.  We got locked in at 3.375% a number of weeks ago and went under contract three weeks ago on a condo that has been part of our relocation plan.  Don't have to sell an existing residence.  Been trying to figure out whether to stick with it (I can always find a way to crater a deal) by balancing higher rates down the road vs. a 20% (?) decline in the value of properties in the next few months . . .  

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It's about affordability.  In many cases, buying is as affordable as renting.   If you intend to stay in one place for a few years or more, yes, buy. 

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Posted (edited)
5 hours ago, Gil Bang said:

It's about affordability.  In many cases, buying is as affordable as renting.   If you intend to stay in one place for a few years or more, yes, buy. 

I think you're a bit skewed by the SoCal market and Prop 13 in Cali. A lot of markets aren't going to cover 6% agent fees plus loan origination fee in a few years. That is compounded by the latest tax code capping mortgage and property tax deductions.

I applaud you for understanding traditional agent rates are absurd  at modern values but you are not common.

Edited by ShaggyBevo RIP

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14 hours ago, Upgrayedd said:

 We got locked in at 3.375%

When you say locked in, do you mean for the term or is that a variable rate? If that's term, you're gold. Personally I think interest rates are going to take a steep spike before this is all said and done with. 

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5 hours ago, RPM said:

When you say locked in, do you mean for the term or is that a variable rate? If that's term, you're gold. Personally I think interest rates are going to take a steep spike before this is all said and done with. 

Term

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On 3/23/2020 at 11:12 AM, Upgrayedd said:

Cross posting here.  We got locked in at 3.375% a number of weeks ago and went under contract three weeks ago on a condo that has been part of our relocation plan.  Don't have to sell an existing residence.  Been trying to figure out whether to stick with it (I can always find a way to crater a deal) by balancing higher rates down the road vs. a 20% (?) decline in the value of properties in the next few months . . .  

How long do you plan on owning it?  Denver's market has been very strong for several years and has been supply constrained.  We bounced back faster from the Great Recession than a lot of other cities did and I would expect the same here.  Not to say there is no risk, there absolutely is, but if you found something you like and will want to own it long term, I'd still do it.

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I think this summer will be really interesting.  It's traditionally selling season, but will as many people be moving as usual?  There could potentially be a lot of movement due to people either losing their jobs and downsizing or losing money in the market and wanting to downsize to save.  On the other hand, potential sellers might want to sit for longer knowing their dollar won't go as far.  We're in the market to buy but will be standing by to see how the market looks in a couple months.

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3 hours ago, Chewbacca said:

How long do you plan on owning it?  Denver's market has been very strong for several years and has been supply constrained.  We bounced back faster from the Great Recession than a lot of other cities did and I would expect the same here.  Not to say there is no risk, there absolutely is, but if you found something you like and will want to own it long term, I'd still do it.

Planning on it being the last one - at least for the next 10 years.

Not Denver.  Edwards/Avon area.

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20 hours ago, Upgrayedd said:

Planning on it being the last one - at least for the next 10 years.

Not Denver.  Edwards/Avon area.

That changes things a bit.  Mountain communities get hit harder in recessions and they bounce back slower because there are so many second homes up there and that is one of the first things to go when times get tight for people.  But with a long horizon, you are probably OK.

 

I don't know the Vail Valley very well in terms of real estate, but I can tell you that after the peak of 2007, real estate in the Winter Park area got hit really hard.  Prices didn't recover back to 2007 levels until probably 2015 or 2016.  They are well above that now, but I expect a pull back.

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