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Homeownership: Why Wait?


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23 replies
  1. Mike
    Mike says:

    It turns out it did not hurt to wait or not. Especially if you saved more for a downpayment or moving costs or just ended up finding a better house for your family.

    The rest of this year will be interesting to watch as we go into the slower season.

    Great graphic that shows something that few, if any, in the real estate industry predicted. Keep up the great work and we’ll stay tuned for the addition of the upcoming months.

  2. Stephen Foster
    Stephen Foster says:

    Why not wait? I am telling clients to hold on.. the dust has not settled. The President is about to get into a fight with congress over jobs. Congress has another go around like the debt mess..wait watch and forget the stock market..that’s a casino over there…
    WIth the holidays coming on…there might be a good time to buy. The rates are stable till 2013..
    Some of my clients are paying ALL CASH…so hold on..wait..plus they are not finding what they want..not 100% perfect house just not what they want..I always myself have bought in the holiday time and moved after the 1st of January..
    NAR even said yesterday that people are scared. Let them calm down..rather be the voice of reason than the voice of a sales agent trying to make a buck.

  3. Pete Sambets
    Pete Sambets says:

    AHH, but maybe it DID hurt to wait. In the past year, with the median price inching upward, but rates dropping, the P&I remain about the same. But where was this buyer living? Were they paying rent, making the “saving for down payment” more difficult? Also, did the buyer pass up on “The Perfect House” because they were waiting for the prices to drop? NOBODY predicted the interest rates to drop! SO….it did cost something to wait, and the buyer, in this scenario got lucky! What will it look like one year from now? I say “If you find that perfect house now, why gamble any longer!!

  4. Mike
    Mike says:

    As for how much “equity you would have built”. The answer would be that you would have paid down around 2k of principal in the 1st year. Of course, in order to realize it you would have to sell your home. If you were using a “professional realtor” to do it you would be paying 6% in commission (over 10k). Not to mention moving costs etc.

    One year of waiting in this case would neither make or break you. The constant “buy now” hype has gotten annoying to many buyers and lacks credibility because it is the only message they ever get.

    Steve, to his credit, has engaged in a balanced discussion of this.

  5. Steve Harney
    Steve Harney says:

    Great comments all day long! The only thing I would like to add is this. In these times of economic uncertainty, every decision we make seems to hang on the financial consequences of that decision. This InfoGraphic shows there was no real ‘financial consequence’ to purchasing six months ago or even a year ago.

    However, there may have been other consequences. How many families did not move to the home of their dreams? How many children are not going to the school their parents had wanted for them? How many families remained separated from loved ones or friends?

    There are many reasons to buy your own home. Financial aspects should be considered. So should all the other reasons.

  6. Mike
    Mike says:

    Looking forward to a monthly update of this chart. With the “twist” operation and the possibility of lower rates going into the slow season it will be interesting to see what affordability looks like. Keep up the great work.

  7. Mike
    Mike says:

    I had used the mortgage numbers that came out at the same time as the average sales price. This appeared to be consistent with the numbers you had used previously.

    Regardless I agree with your more recent articles that are urging sellers not to wait.

    • Steve Harney
      Steve Harney says:

      @ Mike,

      I wasn’t trying to correct you. I just wanted to use the latest rate since it went lower. You have me very sensitive to reporting accurately on this issue. This Friday’s InfoGraphic is going to drive you crazy. However, I think it is important.

  8. Mike
    Mike says:

    Another tick downward on the monthly measure. With that said I think we are close to a point where the utility of waiting for the price/rate combination is waning.

    Possibly the biggest winners right now are the remodel contractors who will be updating the investor/foreclosure glut that is hitting the market.

    The “cost of waiting” may now be very relevant for the reluctant seller who will have to compete with many updated houses in the late winter and early spring.

    Meanwhile the thing very few are writing about is likely underway. An economic recovery which will ultimately be part of the fuel for an improved real estate market.

  9. Mike
    Mike says:

    Got a house under contract today. Went on market last March for over 400k. Was under contract twice for over $330. 325k contract. Looks like we’ll get 4.25 or less on a 30yr loan. Actions speak louder than words. Hope I got in at a good time but I’ll tell you for sure in 10 years.


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