buying now or waiting another year?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you buy in the next couple of months you will be being buying at the worst possible point since 2007. If you are comfortable with that, that’s up to you, but I would ask what is so urgent that you can’t wait 6 or 12 months? The people who are telling you to buy now, that it will be fine, are realtors who have a personal financial stake in keeping the inflated market going for as long as possible. These are salespeople. Talk to a market forecaster who has nothing to gain from you losing money on a purchase. Read about what’s going on in the larger market, what the rising interest rates will do to prices, what the Fed is doing and predicting. Don’t listen to salespeople.

Incidentally, the people who said don’t buy last year were also right. People who bought in 2021 will take a financial beating too during the downturn. Just not as bad a beating as the people buying now. In a few weeks it’s expected their houses will be worth whatever it’s valuation in 2019 was. They didn’t buy at the absolute peak (which was probably last week) but they still paid a premium they won’t be able to recover anytime soon. Talk to someone in your real life who understands market behavior. Don’t take anonymous advice from a bunch of realtors on the internet.

This PP is trying really hard to sound smart, but here's the hard truth.

1) Housing supply has grown much more slowly since 2007, at the same time millennials have entered their family formation phase and are looking to move to SFHs; they are actually being joined by Generation Z who will likely look to have larger homes sooner because of WFH and the value of outdoor space for this COVID generation (its never going away right).

2) Low rates have definitely made more people capable of paying more for homes, but there are plenty of families being helped by boomer parents, and of course institutions buying more and more SFH. https://www.cnn.com/2021/08/02/business/family-homes-wall-street/index.html Rates have to get really really high to beat out the rental income and with inflation, rents are just going up and up.

3) Rising rates may soften prices of stall them, definitely seems possible, but you as a buyer with a mortage, will likely end up paying MORE over the lifetime of your loan with higher interest payments. MAYBE you can refinance in a decade if we see "historically low" interest rates again. But in the near term, your monthly payment will likely be much higher if you delay further and buy within the next decade.

One caveat, if WFH really really becomes a thing, and you can work from anywhere, that could really hurt major metro markets -- make no mistake, people move to DC for access to Congress and jobs. So if you believe we are in new digital remote only frontier, then you can settle down in Boise and call it a day.

My recommendation, since you have been looking for TWO FING years is temper your expectations, get yourself into some kind of property that you can comfortably afford even with a downshift in your career, and become somewhat coupled to the housing market rather then buffeted by the waves of rising prices and rents as a renter. Basically, get a house with a mortgage as a good old fashioned inflation hedge you can live in.

This is the way.

Just buy when you a) think there's a good chance you'll be in the area for at least 5 years, b) can put 20% down, c) find a house you like that meets your needs. If that's not you, do not buy now ... or at any time until you hit a/b/c.

The doomsayers who say the housing market will crash in "weeks" are FOS. Could it happen? Sure, if WW3 truly starts. Otherwise, no way an abrupt change happens so fast.

Most likely housing prices will go flat or appreciation will slow or prices will slightly decrease. Why? Because because there is no likely singular event that can make any change "happen fast."

No matter how self-assured somebody sounds on here, and intuitively it would make sense for the market to start to at least see slower rates of appreciation...part of the hurdle for that is that inventory remains low compared to demand and the cost of labor and building materials and land have never been higher. People can have all the theories they want, but until inventory drastically increases or the cost to build goes way down...it's pretty challenging to imagine a scenario that causes a sudden down-turn in prices.

Okay, Mandorian, no one has said crash. People, including the Fed, are saying there will be a downturn *beginning* in the next few weeks. Beginning. Not crash. Also, you seem to have conveniently overlooked the data showing that new building starts are at their highest levels since 2006. So new building is surging.

So in 1 year they have made up for a deficit 14 years in the making? Even with supply chain issues?

https://www.businessinsider.com/us-underbuilding-housing-over-the-past-decade-2020-9

New starts are at the highest level since 2006, so I guess the industry is finding a way around supply issues? In truth, because existing house prices are so high, new builds can charge a surcharge for supplies and still compete just fine. Supply is responding to demand, as you would expect when people are willing to pay for it. Supply is expected to increases in existing homes as well, as millions of prior posts have described in detail. A market as out of balance as this one has been will find a way to correct.

Wait I must have missed those million posts: why is existing home supply going to explode?

[Anonymous]

Anonymous wrote:Ughh, people are taking about "worst time to buy since 2007" and "bubble bursting" in the coming weeks. To me it sounds like they're tacitly trying to suggest a crash...or maybe they're just saying it to stoke fears and sound smart--either way it seems a bit deceiving. They could be right, but I think it's very unlikely.

If you state the beginning of a downturn, then sure that's possible. I could certainly see home prices down 1-3% in 2023 compared to now. Or they could be up by that much. Who knows?

Please show me this "data" I'm conveniently overlooking talking about all these new SFHs[b] or even townhomes in areas people always talk about wanting to move to on DCUM-- ie NW DC and the close in parts of Arlington, Alexandria, TP, SS, Chevy Chase, Bethesda? Because there's almost no vacant land in those areas.

And for the record I am not buying or selling right now.

Sure. https://tradingeconomics.com/united-states/housing-starts

Your local Mando here.

So per my post I asked about data for the perennially popular parts of the DMV. Your link describes not that. It speaks to a national trend and, well, there's still a lot of space to build on in this country...and so this isn't really applicable to our market.

Also, you conveniently don't mention the last part of your link:

"At the same time, building permits which are a benchmark for future home construction fell 1.9% and several indicators point to a slowdown in the housing market in the coming months: mortgage rates are back to 2019 levels; commodity prices remain elevated due to Russian invasion of Ukraine; and the NAHB homebuilder confidence dropped to a 6-month low in March."

...which would suggest that all these new SFHs (only 2/3 of the overall number in what your article counts btw) aren't exactly built on mountains of sunshine and rainbows...

Thing is, I don't totally disagree with you. I think there's a real chance that housing prices could be down 1-3% by next year. I also think they could just as easily be up by that much. Or somewhere in between. I'm just less "certain" than you.

And FWIW I've kept my helmet on this whole time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ughh, people are taking about "worst time to buy since 2007" and "bubble bursting" in the coming weeks. To me it sounds like they're tacitly trying to suggest a crash...or maybe they're just saying it to stoke fears and sound smart--either way it seems a bit deceiving. They could be right, but I think it's very unlikely.

If you state the beginning of a downturn, then sure that's possible. I could certainly see home prices down 1-3% in 2023 compared to now. Or they could be up by that much. Who knows?

Please show me this "data" I'm conveniently overlooking talking about all these new SFHs[b] or even townhomes in areas people always talk about wanting to move to on DCUM-- ie NW DC and the close in parts of Arlington, Alexandria, TP, SS, Chevy Chase, Bethesda? Because there's almost no vacant land in those areas.

And for the record I am not buying or selling right now.

Sure. https://tradingeconomics.com/united-states/housing-starts

Your local Mando here.

So per my post I asked about data for the perennially popular parts of the DMV. Your link describes not that. It speaks to a national trend and, well, there's still a lot of space to build on in this country...and so this isn't really applicable to our market.

Also, you conveniently don't mention the last part of your link:

"At the same time, building permits which are a benchmark for future home construction fell 1.9% and several indicators point to a slowdown in the housing market in the coming months: mortgage rates are back to 2019 levels; commodity prices remain elevated due to Russian invasion of Ukraine; and the NAHB homebuilder confidence dropped to a 6-month low in March."

...which would suggest that all these new SFHs (only 2/3 of the overall number in what your article counts btw) aren't exactly built on mountains of sunshine and rainbows...

Thing is, I don't totally disagree with you. I think there's a real chance that housing prices could be down 1-3% by next year. I also think they could just as easily be up by that much. Or somewhere in between. I'm just less "certain" than you.

And FWIW I've kept my helmet on this whole time.

I disagree with your conclusions, but I really don’t think I could love the Mando poster more. Love it.

[Anonymous]

You should wait.

[Anonymous]

if u hate money buy now

[Anonymous]

We are waiting. We bought at the peak in 2007 (not dmv) and were under water on our mortgage for years (we were young, 1st time homebuyers). Ended up becoming landlords (we still own the property).

We have learned our lesson! So we will continue to rent and watch what happens with the market for now.

[Anonymous]

Anonymous wrote:We are waiting. We bought at the peak in 2007 (not dmv) and were under water on our mortgage for years (we were young, 1st time homebuyers). Ended up becoming landlords (we still own the property).

We have learned our lesson! So we will continue to rent and watch what happens with the market for now.

Mando again one last time...

You are doing it right. Don't buy unless YOU feel it's the right time for you.

That is the way.

Nighty night

[Anonymous]

Another NP. We are waiting too. Unless the perfect thing comes up.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are waiting. We bought at the peak in 2007 (not dmv) and were under water on our mortgage for years (we were young, 1st time homebuyers). Ended up becoming landlords (we still own the property).

We have learned our lesson! So we will continue to rent and watch what happens with the market for now.

Mando again one last time...

You are doing it right. Don't buy unless YOU feel it's the right time for you.

That is the way.

Nighty night

I wish Mando was every poster on here! ❤️

[Anonymous]

Obviously prices are crazy right now and mortgage rates are rising, but with that said it’s hard to predict if and when there will be a major correction because it would likely be caused by a recession, which nobody can pinpoint. If you are looking for a short term starter home, it’s riskier, but if you’re looking for a ten-twenty year plus “forever home” it won’t really matter in the long run if you overpay initially- appreciation will cover it. As long as you’re not house poor, would look at this as a place to live versus solely an investment.

[Anonymous]

Anonymous wrote:A lot of the people saying don’t buy are just trying to cut down on the competition.

+1 Same issue on every real estate thread for the last 10 years.

[Anonymous]

Anonymous wrote:Obviously prices are crazy right now and mortgage rates are rising, but with that said it’s hard to predict if and when there will be a major correction because it would likely be caused by a recession, which nobody can pinpoint. If you are looking for a short term starter home, it’s riskier, but if you’re looking for a ten-twenty year plus “forever home” it won’t really matter in the long run if you overpay initially- appreciation will cover it. As long as you’re not house poor, would look at this as a place to live versus solely an investment.

A lot of people talk about forever homes, and staying in your home at least 10 years, but that’s not at all practical for many of not most people in the DMV, which is one of the most transient areas in the country. People need flexibility because most people come here for work, not to settle down forever. Professional opportunities may evaporate here (changes in administration, changes in military appointments, promotions, etc). Asking people to only buy if they are pretty sure it’s their forever home (or their 10 year home) is at best wishful thinking for many people here. It would be better to buy in a more moderate cycle when things were slanted so strongly in favor of sellers, because otherwise it’s just a gamble for most people and they’d be better off renting.

[Anonymous]

Anonymous wrote:

Anonymous wrote:A lot of the people saying don’t buy are just trying to cut down on the competition.

+1 Same issue on every real estate thread for the last 10 years.

Realtors make it way too easy to spot their profession. Sure, guys. cUz ThIs TiMe iS sUPeR dIfFeREnT.

[Anonymous]

I just bought. These posts stress me out a little. I paid premium (over asking), but not absurdity (ie 100+ over asking). I’m lucky that I was already a home owner and am preparing to sell, so fingers crossed we sell high also. The part that stresses me most when I read these posts is that we currently live in a desirable close in neighborhood, and we are moving further out. I think it’s likely our new home could see a small drop in value in the months/ my ears ahead. But then I remember it’s the right home and location for my family, we didn’t financially over extend ourselves, and it will make daily life much better. And I’m at peace with that. The thing is, I have all this stress when I read these posts… and yet I also believe that the DMV real estate market is different, that WFH is here to stay and yet won’t change things that much in the near term, etc. no one knows what will happen. Waiting would have been very difficult for my family so I am glad we didn’t do it. Only you know what’s right for you and your family OP.

[Anonymous]

Anonymous wrote:I just bought. These posts stress me out a little. I paid premium (over asking), but not absurdity (ie 100+ over asking). I’m lucky that I was already a home owner and am preparing to sell, so fingers crossed we sell high also. The part that stresses me most when I read these posts is that we currently live in a desirable close in neighborhood, and we are moving further out. I think it’s likely our new home could see a small drop in value in the months/ my ears ahead. But then I remember it’s the right home and location for my family, we didn’t financially over extend ourselves, and it will make daily life much better. And I’m at peace with that. The thing is, I have all this stress when I read these posts… and yet I also believe that the DMV real estate market is different, that WFH is here to stay and yet won’t change things that much in the near term, etc. no one knows what will happen. Waiting would have been very difficult for my family so I am glad we didn’t do it. Only you know what’s right for you and your family OP.

Let’s say you end up losing 100k on the house whenever you sell it.

Does that translate into a life of poverty? Do your kids not go to college? Do you have to work until you’re 90? Do you starve?

Assuming that you didn’t wildly overextend yourself and you invest/save a reasonable amount each year, the answer to all of these is: no.

So what’s the worst thing that happens? Is it that bad?

It sounds like you made the best decision for your family. Rest easy.

This is the way.