The Tacoma News Tribune Real Estate blog recently commented on the fact that many buyers still seem hesitant to jump into the market, despite all the press about it being a buyer’s market now. Devona Wells writes, “But I think, too, that buyers might be trying to time the market – wait for the low point, so they don’t buy now and find out three months later that prices have since dropped.”
But in my opinion, Buyers who are waiting till the bottom drops out aren’t necessarily looking at the big picture. If you are currently renting, you are throwing that money away when you could instead be spending it on an investment that WILL appreciate over the long term.
If you want to try and flip a home, that’s one thing, but if you are thinking of living in the home for several years, then you will weather whatever dips may come in the next few months. Almost everyone agrees that three years from now, when you want to sell or refi, it will be a very different market, and you WILL have equity. And in the meantime, your payments will be tax-deductible; you can’t say the same for those rent checks that you are sending in every month.
Now, of course, don’t be reckless and buy a home that you can’t afford… If you need to refi in a year, you won’t see the appreciation that owners saw in 2004 and 2005. But if you’re smart and get payments that are reasonable and you’re thinking long term, buying now or in 6 months when the market *might* be a bit lower won’t make much difference–except that every month you wait is another month you won’t be able to take advantage of the tax deduction.
To see the whole conversation, click here: Is this a good time to buy in Pierce County?
December 13, 2007 at 10:49 pm
Thanks for your comments on that TNT blog. I think you raised some good points, and it is a shame that other writers dismiss so many comments simply because they came from realtors. I guess some folks just have had bad experiences with realtors and it has colored their perspective. But I think your point about Real Estate Tax Advantages was excellent. And thank you for your analysis about Wazzeus’ “friend” who thinks he will save more money by waiting to buy.
As someone with several investment homes, I see this as a great time to buy. What do they say when the stock market is low? Buy, buy, buy! So the price may go down a bit over the next few months, but if you hold onto it long enough, it will go back up again. Plus you will reap all sorts of other benefits in the meantime. Just don’t be stupid and buy something you can’t afford–and that advice is good no matter WHAT the market is like!