When should first-time buyers dive back in?
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If you’re a first-time wanna-be home buyer -- and I’ve heard from several of you eager to take advantage of those possible 4.5% interest rates -- last Friday’s article in the New York Times may offer some food for thought. From ‘It May Be Time to Think About Buying a House’:
Five or 10 years from now, when the financial crisis has ended and housing prices are up smartly once more, we will look in the rearview mirror and realize that we missed a golden age for first-time home buyers.... Unfortunately, we do not know when this golden age will begin, because we will be able to identify a bottom to the housing market only with the benefit of hindsight. But as it does with the stock market, the moment will probably arrive when everyone is feeling the most pessimistic.
Nothing new about hindsight, but the story cites a report that might help put some polish on the crystal ball, ‘The Changing Prospects for Building Home Equity.’
The study is pretty rough sledding but basically looks at the nation’s largest metro areas and identifies which markets could see declines ‘including potential six-figure drops on an average home in the New York City, Los Angeles, San Francisco and Seattle metropolitan areas’ by 2012.
Overall, the N.Y. Times article may be worth a look for those thinking about diving into the housing market some time within the next couple years, but I found it too rosy and it was hard to get past the highly subjective moment ‘when everyone is feeling most pessimistic.’ For now I’m liking the Dec. 4 BeaconEconomics report summary: ‘Housing: still dropping.’
--Lauren Beale
Thoughts? Comments?
