As the inventory of homes on the market in St. Paul continues to fall I am seeing more situations where buyers find a home they like but before they can buy it someone else does. I know this is hard to believe but it is happening more and more often. The best homes are selling quickly.
For buyers who are ready to buy and have been shopping for awhile my advice is that when you see a home you want to buy don't wait for the price to go down or wait for anything. Make an offer even if it is not a full priced offer. If you don't someone else will.
I posted some numbers last week and there really are half as many homes on the market this month as there were last August. Prices do not seem to be going up at all but I don't think they are going down either, or if they are they are going down much more slowly than they were.
There are some bargains out there too. I am seeing some large price cuts on some of the new construction. The builders have not been building much in the last year and are selling off the last of what they built in prior years.
Buyers all ask the same question and that is if they buy a home now, how much will it be worth in a few years. I wish I had an answer but I don't. I know that rent goes up every year and that this year we have low prices, interest rates are at a 37 year low and there is a nice tax credit that goes up to $8000 .
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Whatever you have mentioned is absolutely right. Because at present the real estate market is going through its bad times as a result the prices have touched their all time low. So it is better to get the home asap.
Rents have actually dropped in many areas. Being a renter, and having recently been in the market for a new place, landlords are cutting better deals, throwing in a month or two of free rent or reducing the price.
The recession has caused drops in employment and income levels. Rents are very closely tied to these two numbers, even more than house prices.
House prices are more subject to sentiment, interest rates, and the debt-to-income levels available to buyers.
You can’t use leverage with the rent.
I guess I get a little huffy about comments like “rent goes up every year”, when I experienced the opposite. Renting comparable places costs about the same as it did eight years ago, so adjusting for inflation, renting is as good a deal if not better than it used to be.
This is not an argument against buying, of course. If someone feels that now is the time, well, by all means – go buy a house.
I, however, am quite confident that the rent vs. buy question will remain a coin flip for another year of three. At this point in time, there are too many economic factors involved for housing to be a no-brainer as a general rule.
We will eventually have another housing boom, of course, and then you’ll be crazy not to buy.
PB – I stand corrected. I was not aware until yesterday that rents had gone down but it makes sense that they would. I guess I was remembering when we rented and the landlord raised it each year but that was during a different time. I agree that right now renting vs. buying is a coin flip. I can see advantages to both.
We’re seeing the same thing in the Phoenix real estate market. in the under $200,000 price range it isn’t unusual for homes to come on the market on Friday and have multiple offers on it by Sunday night. It’s great that homes are selling and our inventory is down dramatically but it can be very frustrating for buyers.
This is a good post which is throwing light on how competitive is the real estate market is. What comes out of this post is really nice that we need not wait for prices to come down because the market trend is volatile and no one can predict it so it is advisable to buy as soon as possible rather than waiting.
Really? You don’t seriously think they will go up any time soon do you?
It is a very high time to invest in real estate. Prices are low and rate if interest is low. It is a wise decision to invest in real estate. Prices will hike in future and it would be tough to afford a house for you then.
Yes maybe in five years.
37 years low interest rate, well this is a big news…