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Considering that the sellers are only now starting to reduce prices and starting to panic a bit, I think all buyers should wait as long as possible.
If 2007 continues the way 2006 has been, it could trigger country-wide panic amongst sellers and restore prices closer to where they should be.
Now, it’s not a completely wrong argument. But when it was made to be, I calmly pointed out that 5 to 10% of a typical BA home (800K to 1M range) is anywhere from 40K to 100K. This amount is nothing to sneeze at.
Though arguably if you assume just 1% annual appreciation, a 10% drop will be made back in ~11 years. 8% in ~9 years.
Five to ten percent matters if you put no money down and plan to flip the property...
The URL below says:
"based on what we could find on Amazon, more Flipper books have been published over the one year period ending March 2007 than we could find over the previous 20 years -- combined."
FAB,
Priceless link, thanks! Old Robert Cote had made a comment that was.... well, in character shall we say?
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Happy New Year to you all ! Hope everyone had a great holiday.
There is a new kool-aid flavor in town. During the holiday parties, I sensed a different mood and encountered a new argument. Coincidentally, I also overheard a similar argument while in the line at a local Safeway.
Here is a snippet of conversation between two males, standing behind me in the line while I was paying.
First : So did you buy a house yet ?
Second : No man, still waiting. Prices seem to be coming down.
First : Oh common. They won't go down much. Maybe 5 to 10%. At the most. And you know what, in the long run it doesn't matter.
Second : Yeah, that's right.
I completed my payment and had to leave, so I do not know how it ended.
Now, it's not a completely wrong argument. But when it was made to be, I calmly pointed out that 5 to 10% of a typical BA home (800K to 1M range) is anywhere from 40K to 100K. This amount is nothing to sneeze at. Considering how long it takes to save this amount of money, IT DOES MATTER ! The discussion ended right there.
Given the most bullish scenario seems to be for prices to stay same in 2007, there is absolutely no harm in waiting. Even in that case, I will have saved more for my down payment, which would help offset any increase in mortgage rates.
Assuming many would come to similar conclusions, I think it is very safe to make one prediction. This year, buyers will not feel the pressure. There is no hurry to buy in 2007.
StuckInBA
#housing