First Time Buyer

This has been discussed many times here - just searched the threads - and the answer here seems to be overwhelmingly wait....

A bargain about to be a bigger bargain is no bargain at all.

Prices just started dropping, and you don't get V recoveries in RE. We're in the beginning of a long decline...

If you can afford it over the long term, it's always a good time to buy.

oh no...thought you went away for good...mr...i live in a 1,700 sq ft one bedroom paying $500 a month.

That makes absolutely no sense....

Just because you can afford something doesn't mean you should buy it... and, more importantly, OVERPAY for it.

1sttime, you should keep an eye on interest rates, but i don't see how they can be raised too quickly. the resets/recasts will give the banks ulcers even at very low interest rates, they'd stink like the turds that they are if interest rates rose too much.

sorry, was referring to this...

"If you can afford it over the long term, it's always a good time to buy."

That makes absolutely no sense....

Just because you can afford something doesn't mean you should buy it... and, more importantly, OVERPAY for it.

2008 was CERTAINLY not a good time to buy (but, of course, tons of similar "experts" said otherwise then, too).

things have not shaken out yet.. would recommend waiting if you can... but if somethings great comes along take it.. maint + mortgage with 20% down, means u will be paying close to 4000

A lot depends on whether you find what you want. If the absolutely perfect situation presents itself, and you're planning to hold it for 10 or so years, then sure, buying now might make sense. If, however, you've got $700K burning a hole in your wallet and you're looking at RE primarily as an investment then I'd probably wait a bit

"1sttime, you should keep an eye on interest rates, but i don't see how they can be raised too quickly. the resets/recasts will give the banks ulcers even at very low interest rates, they'd stink like the turds that they are if interest rates rose too much."

Lets not forget that if interest rates rise, that will simply push down prices even more.

That's right. Higher rates = lower prices. And you'll be able to make a larger percentage downpayment and have greater mortgage interest deductions (for the same carrying cost outlay).

If the apartment you want is available at a price you can afford, it's always a good time to buy.

Housing was never intended to be an *investment*. It's HOUSING. In the long run, it will always be cheaper than renting.

Ohhhhhh NYCMatt - for a lot of buyers in the last 4 years that's going to be a verrrrrrrrrrry long run isn't it . . .

1sttime ...keep in mind you are listening to a bunch of very bitter renters who are afraid to take the plundge into actually owning where they live instead of paying off someone elses mortgage each month
If the numbers and property work..go for it!
GOOD LUCK!

Learn everything you can first!

Prices are still very high by historic standards. Get familiar with the stats available on Miller Samuel's excellent web site. Play with the Data Tab:

http://www.millersamuel.com/data/index.php

Prices are still triple what they were at the start of the bull market.

Knowledge is power.

>>keep in mind you are listening to a bunch of very bitter renters who are afraid to take the plundge into actually owning where they live<<

Huh? It's peak buyers who are 'bitter', stuck with plummeting property values and heavy loans and no way out in sight. Renters, meanwhile, are happily sitting in the catbird seat, watching prices continue to fall and poising themselves to pounce when the time/situation is right.

How, exactly, does that translate to 'bitter'?

I agree with NYCMatt that looking at housing as an investment is probably foolish, but I disagree that it "will always be cheaper than renting." It is not cheaper to buy when you are putting all of your capital in the purchase and your carrying costs of that purchase are significantly higher than renting, because it's suicide to put all your money in one asset class, particularly if that asset class is housing. For most of us, an apartment should be a dwelling and not our "nest egg."

how can you not look at buying an apartment as an investment? perhaps you may want to consider it an investment that doesn't require a similarly high return as pieces of paper (stocks, bonds) because you get to to live there. but however you look at, given the sums of money (and risk) involved, you would be foolish to not consider what happens if and when you need to sell.

i just love people who say, if you can hold on long enough, it will work out. sure....but what happens if you can't?

My humble advice for right now--be on the lookout for the desperate ("motivated") seller. Every market has 'em, but I am convinced we have more of them now than usual.

I'm closing on an investment property upstate next week. A couple years ago I bought a good property via a particular agent, so out of the blue I called her again, and she told me about the property the night before it was to be listed publicly. I made an offer the next morning, which was accepted instantly (to my surprise since I thought my offer was rather low, and it was new to market). It went that way because, the agent told me once the deal was in the bag, that the prop was owned by a widow of 6 months "who just really has to sell." That's probably code language for a looming foreclosure.

Since most people use agents when they have to sell--I never have, but that makes me a little unusual--if I were you I would cultivate a relationship with a couple of agents by hitting open houses. Not just one agent ("no one owns a buyer"), chat up a couple of 'em. See who has his/her nose to the ground. Tell 'em you're looking for a seriously good deal, volunteer that you're a qualified buyer without spilling your financial guts. If you're a cash buyer be sure to say so.

Sounds like you have an advantage in that you're not desperate and can wait for awhile, or forever. The person who can walk away from a deal is always in the stronger negotiating position, and with a motivated seller that's you. But as Topper said, knowledge is power and it takes awhile to acquire, so getting started now is a really good idea.

Happy hunting and good luck!

Because, Columbia, eventually you will pay off your mortgage and you will own the home free and clear. Renters will NEVER see that payoff, and will only see their rents climb. Forever.

CC that's not what I'm saying. I'm saying don't expect it to outperform or even perform as well as stocks or bonds. I'm saying housing should not be your major investment nor the place where you take risks. It's shelter. You pay for the stability (vs. renting), for the schools or whatever else you can reasonably afford that will allow you to be happy in the place over the long-term, but you don't buy expecting to make money off it.

i agree completely but....you also don't buy expecting to lose 30%.

"Because, Columbia, eventually you will pay off your mortgage and you will own the home free and clear. Renters will NEVER see that payoff, and will only see their rents climb. Forever."

renters will also never get stuck in a situation where their apartment is underwater, they have relocated out of the city, and the Coop Board won't let them rent it out any more so they either get to sell and come to the closing with a check to make up the short sale or carry the unit vacant until the market gets better. Let's see, I carry the unit for 18 years vacant till I pay off the mortgage, but then I own it free and clear!!!!!!!!

If the US and the A was true to its principles i would say that this is a terrible time to be a first time buyer and its better to be a renter. That the leverage that was created in the RE market needs to be worked of and written of and that will depress property prices.

Unfotunatly all we do is pay lip service to our principles,we preach to other nations about how markets should be managed and that they should let bad institutions fail (aka crappy banks). But the truth is that when our time came to deal with "bad institutions" we like the president of Zimbabwe have universally agreed that we will print our way out of it.

That said, its hard to predict what all this unpredictable preferential treatment will do to a piece of real estate that you choose to aquire.

good luck and only get less then what you can afford easily cause there is an excellent chance that you will not make the money that you think you will make.

First time buyer..

Since the recession is ending and you still have the opportunity to buy from the "need to sell" sellers. I would def search for those deals while interest rates are at record lows and before the sideline buyers get back into the game.

I guess I haven't been lurking that long but.... This is a fakepost/gimmick post right?

I'm in a similar situation, I live in a stabilized apt, but will soon outgrow it.

I'm deciding whether to rent a larger market rate place in the same nieghborhood or buy. I can rent a larger place for a year or two (about 1200 sq ft) and see where apt prices go. However, I can't afford to buy a similar place in the same neighborhood ($1000/sq ft) because rents and mortgages have such a huge $ difference. An apt that would cost me around 4k to rent would be over 1M to buy.

So I've pretty much decided to probably to rent, even though no equity is gained, I get a lot more space to live in if I rent, and will be able to stay in an area I love.

"If the apartment you want is available at a price you can afford, it's always a good time to buy.
Housing was never intended to be an *investment*. It's HOUSING. In the long run, it will always be cheaper than renting."

Only if you don't know math.

"Because, Columbia, eventually you will pay off your mortgage and you will own the home free and clear. Renters will NEVER see that payoff, and will only see their rents climb. Forever."

Again, your math is just lousy.

When housing prices were are high, its STILL a better deal for renters

Really, do the math.

Which is more expensiv... paying $5k per month for 30 years.
Or 1k going up 3% each year until you die (lets even say 50 years).

Hell, make it even infinity....

If you pay too much for the asset in the first place, not paying rent AND payments ending after 30 years often won't make up for your loss.

"First time buyer..

Since the recession is ending and you still have the opportunity to buy from the "need to sell" sellers. I would def search for those deals while interest rates are at record lows and before the sideline buyers get back into the game."

Firs tiem buyers, SteveF is a condo "investor" who bought at the top of the market and is trying to sell his "investments". He said that sideline buyers were getting in a YEAR ago. No joke. He says this each week, all while RE values continue to drop.

The recession, btw, isn't ending yet... the predictions are at best for it to bottom at the end of the year.

And, the other HUGE mistake (probably an intentional one) that SteveF makes is that housing trails the economy and the stock market.

The RE marketing in manhattan took FOUR YEARS to bottom after the 87 crash and economic downturn.

Yes, we'll recover. But being 4 years ahead of the game is a recipe for disaster.