HI
My husband and I have always rented but we are considering buying within the next few years IF we can get a house for a reasonable price. I wouldn't even consider it right now due to the ridiculous housing prices, but when do you all figure would be a good time to buy again? I keep getting different answers. Some say in a year or two. Some say in 5-8 years etc. What are your educated guesses?
Thanks

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I probably should have prefaced by saying that I have no real background knowledge or anything like that to make my points valid in any way...it's me going, "I'm just sayin'...", so yeah, take it as you will.

The drop in absorption rates--especially among new homes--wasn't attributed to a lack of buyers in my opinion, but the perceived state of the economy and the housing market. The demand hasn't left, it's just sitting this round out. As time goes on, demand will continue to grow, but will be combining with the pent up demand that's been 'sitting this round out' and will create a glut of buyers.

As for the psychology angle, I don't think that it has to do with this Administration or that there's a direct link, I just think that the general psychology will be such that it will seem like a weight lifted off the shoulders of everyone, whether you supported them or not...it's very general. When people are happy, they spend money.

Like I said...I don't know, I'm just throwing ideas out there based on what I think, but with no real numbers to back anything up.



And I thought that the early word was that this year is shaping up to be better than last? Maybe I'm just confusing different things I've heard.

Historically, RE slumps always last years, not months. The last drop in prices in Philly lasted from 1990 to 1994. That drop was proceeded by a a run-up in prices that was nowhere nearly as steep as our most recent run-up. Therefore, there is a real chance that this slump will last at least four years.

That's my take. Time will tell.

oh man, not this thread again.

Word up. Buyers are sitting this round out and so are the sellers.

I'd also pay careful attention to rental prices. If they keep growing that can push people, at least at the entry level, back into the market.

I also wouldn't pin local and regional economies too closely to national or global markets.

As for people looking to the last dip in the cycle - Philadelphia and Center City today are completely different today as compared to 17 years ago.

Then again, this could be the beginning of the end . . . maybe the current currency devaluation will attract the expected foreign investment, maybe it won't. When i see europeans snapping up rowhomes i'll believe it.

My 2 cents:

Real Estate markets descend VERY slowly. The National Real Estate Market will go on about a 10 year cycle before improving again.

The Philadelphia Real Estate market is a totally different story. The outlying suburbs are going to take a hit, but areas in the city and close to center city, will continue to see growth, but much more slowly then before.

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Home price drop largest on record

Tue Nov 27, 12:43 PM ET



NEW YORK (Reuters) - Prices of existing U.S. single-family homes in the third quarter slumped 4.5 percent from a year earlier, matching a record decline from the previous period as the housing downturn deepened, according to a national home price index on Tuesday.
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The S&P/Case-Shiller National Home Price Index fell 1.7 percent from June, marking the largest quarterly decline in the index's 21-year history, S&P said in a statement.
Robert Shiller, a Yale University economist and co-developer of Standard and Poor's S&P/Case-Shiller Home Price Indices, on a Standard & Poor's teleconference following the release, said that at this point there is substantial concern and uncertainty about the outlook for the U.S. housing market.

"The downward momentum is looking impressive right now and at the very least ought to be a source of worry about the future for home prices," he said.

The futures market for the S&P Case-Shiller Composite Index is indicating home prices down another 5 percent in 2008, he said.

On the teleconference, titled "Current & Future State of U.S. Housing Market," Shiller said he is not able to predict the bottom for the U.S. housing market at this point of time.
"We do not know where it is going to go from here," he said. "I would hope that it would motivate people to start thinking about hedging their real estate risk."

The quarterly S&P/Case-Shiller index has been falling since the second quarter of 2006 as lenders clamp down on lending to risky borrowers who had depended on home price gains to keep their homes. Rising foreclosures are adding to soaring inventories of unsold homes, depressing prices further.

The composite month-over-month index of 20 metropolitan areas fell 0.9 percent to 195.62 in September from August, bringing the measure down 4.9 percent from a year earlier.
S&P said its older, composite month-over-month index of 10 metropolitan areas declined 0.9 percent in September to 212.65, for a 5.5 percent year-over-year drop.

Florida is the hardest hit state, with prices in the Tampa and Miami areas down 11.1 percent and 10 percent respectively over the past year, the indexes show. Home prices around San Diego, California, and economically depressed Detroit, Michigan declined by 9.6 percent over the 12-month period.
Lehman Brothers said the decline in home prices is the start of an extended decline in the market.

"We look for home prices to fall well into 2009 as excess inventory is slowly cleared and foreclosed homes return to the market at a discounted price," the company said in commentary published Tuesday.

This will translate to a 15 percent decline in national home prices from peak to trough, Lehman Brothers said.
(Reporting by Al Yoon and Julie Haviv; Editing by Diane Craft)

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It's a bummer that Philly is not included in the 20 metropolitan areas. (What's that about?) It would be interesting to see is Philly is as different as some of us think, especially since this index avoids the use of median prices.

There was a post a few months ago with trend details about the Philly market. I can't find it, can some one repost it?

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Velvet?

5-8 years? Are you kidding me? In that time, we'll be in a completely different real estate cycle.

When to buy depends on what your goals are. I can't imagine why you wouldn't buy if you plan on being here for the next ten years. Owning a home is not just about how much its worth. #1, there are tax benefits. #2, you can do what you want with it without approval from a landlord, and #3, you can build equity. Even if prices don't go up significantly or even continue to fall a bit, so long as you get a good price when you purchase, you should be okay.

If you are going to live in a house for 10+ years, you should definitely buy. In that time, you could build a significant amount of equity just by paying down the principle on the loan. Hell, if you had a 15 year mortgage, your house would almost be paid off.

If you know you are going to be in Philly for the time frame you are alluding to, waiting a year might be prudent. Going to much longer than that just seems a bit absurd given your outlook.

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