Did You Actually Save Money By Waiting to Buy?

by The KCM Crew on October 7, 2011 · 11 comments

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fred ford

no e-mail today , would you please look at my account and see why, thanks , Fred Ford .

http://www.steveharney.com Steve Harney

@ Fred,
We accidentally sent TWO posts to you yesterday (Thursday’s and Friday’s). We didn’t want to bother you by sending today’s to you again.

Mike

Would you pay 5.9% more for a year to enjoy a savings of 2.6% a year for the next 30 years?

Most of the financial problems we face today are the result of short term thinking by a largely financially illiterate population.

http://www.steveharney.com Steve Harney

@ Mike,

Touché. The only question that remains is whether the cost of owning a home changes during the time of the lease. We know that historically rents will increase by 3% a year and mortgage interest rates will again be between 5-6% once the government support fades.

I agree that too many people look at the short term. However, this is how I see it: the 2.6% savings represent a little over $21/month for the average priced home in America. That means that a family can afford a home if they go to Starbucks every other day instead of every day. What is the better investment long term?

http://stephenfoster@realtysouthl.com Stephen Foster

That question you pose would depend on the market you are in or going to be in. In Atlanta, for example, the agents there are thinking it’s not time yet to buy and actually told me to rent. When foreclosures there are going on and for example 1 unit sells for $300,000 then the next sale is $249,000..you just lost $50,000…I have a town house there and rented out but the guy behind me paid $409,000 I paid $603,000 and the 1 up the street are selling for $250,000 in foreclosure..then again the market in San Francisco is very sane ( I worked that market) and they are NOT getting the over bidding and mania as they did say 4 yrs ago. Rates are low, yes but again the Fed says they are keeping them low till 2013..and frankly to get into those good rates YOU need a score of 700 or higher..anyone at 620 or below is knocked out. So if you had 1 ding say for a late payment on a house..you have to wait..1 yr. getting current home owners who want to refi that have 1 late payment are unable to get refied too.
Mike

@ Steve. Agreed we do, and did not know, what direction prices and interest rates will go. Everything being equal I think it is likely that this is a good time to buy.

However, if someone has reasons for waiting they should not feel any pressure to make a hurried decision based on the one sided opinions of those in the real estate/ mortgage industry.

To your credit you generally present a more balanced view and allow for all opinions to be expressed on this website.

http://www.steveharney.com Steve Harney

@ Mike,
Thanks for the great dialogue on this issue. I’ll go one step further. I agree that no one should buy from fear (pressure). If they are not ready for any reason, they should refrain.

Likewise, if ready, they should not refrain from buying out of fear.

http://www.TerriPont.com Terri Pontzious

In San Diego, prices are great and interest rates are at historically low rates….this is absolutely a fantastic time to buy in San Diego! Don’t be a fence sitter, take some action!
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