Ok, so how many of the people that are waiting it out have actually invested in real estate? Those that chase the market never catch it, because by the time you think it’s hit bottom the market has started to rebound. One more thing to consider is that while rates are low they will go up one day and even if prices stay level or even drop several percent an increase in rates means you are paying more for your home. As a homeowner you get added deductions on your income taxes, too.
This is a market of opportunity and someone on Mad Money said recently, if you buy now in five years time you will be reaping the rewards. I would caution though against an area like Temecula where there is so much ongoing construction that will create added competition when you go to sell.
I think the best deals are going to come directly from a builder or on bank-owned properties. Just realize that when buying from the builder you need to factor in the cost to landscape, install window treatments, and furnish the home and most bank-owned properties are fixers. Builders are hesitant to record “rock-bottom” prices so try negotiating on closing costs, upgrade allowances, HOA credits, or even Mello-Roos payoff.
At the end of the day it always comes down to location so pay special attention to things like lot size, proximity to power lines and major roads, privacy, immediate and surrounding neighborhood, and even floorplan as not all of the models in a development have the same appeal.
In 2007 I sold my primary residence for a record high for the plan at $1.330m (paid $925k in 2004 plus added about $180k in improvements), sold a flip for $430k minus $10k for buyer credit (paid $305k five months prior as an REO, put about $55k into it, market time was only about 3 weeks and had 3 offers), bought new primary residence for $950k as an REO have about $75k in improvements and it’s worth a solid $1.2m. Oh, and this follows buying a condo for $565k in 2003 and selling it in 2004 for $835k with only about $15k in improvements. It’s about time to buy again!
I’d like to see where all of these naysayers are in 1-3 years time who’ve lost sight of real estate as a long-term investment.
