I think it is time to buy a house this year. It doesn’t matter in 4S area or not, because
1. US is going to print more money, it will lower your cash value definitely. For the same thing, you need to pay more to buy it later. Although cash is king now, holding the cash and waiting for the housing to drop 5%-10% more is not good idea, you may need to pay more to buy a house later, because your cash weigh less.
2. Mortgage rate was about 4.8% last couple months. Now, the mortgage rate is about 5%. It is more sensible to lock the lower mortgage rate for 15-30 years than to wait for uncertain 5%-10% drop and the rate may goes up.
3. Early this year, one builders in 4S gave 3% for the buyer’s agent. Now, he only gives 2.5% to the agent. It shows the builders can sell their houses and more people to consume the new house. He doesn’t care about the buyer’s agent to help him to sell.
4. Many analysts mentions “Shadow Inventory” on the bank. Right, the banks hold many foreclosured homes but they don’t want to sell them cheap. Short-sell houses keep you wait for long time on the bank approval and push you to give higher bid than the original price usually. Even the house will drop more, it won’t be a lot, because the bank doesn’t want to sell it cheap. The bank only put the foreclosured houses on market little by little, so it won’t lower down the house price.
5. 4S is newly developed. Many non-qualified people bought the houses in 2006-2007 and caused many foreclosures in 4S. The well finance people start to pick them up now and it shows they have solid background to keep their house and value, as the bank approves the mortgage for these people under the strict rules. So, I am not worry about the neighbours in 4S.
