When Buying Real Estate, Better to Wait for Lower Prices or Lower Interest Rates?

A

aeliodon

I think unless you have tons of cash and can pay cash - its better to wait for lower rates and rates are already at historic lows so why miss out on this opportunity to lock in historically low rates for 15-30 years? Even Greenspam as said that rates would have to double to stop inflation. So why wait for an improbable large pullback in price if it comes at the expense of a huge increase in rates?

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Allways using cash for assets; and credit for liabilities.

The big the liabilities; the bigger the credit you take; hoping your banker gets nervous before you.
 
Rates are definitly secondary.

Bottom is not in sight anytime soon.

Pick your targets in a wise mannor.

Miami still has dowside room. As does DC, parts of Cali,

NY, NJ seem to be leveling out...not sure if the bottom is in but I know there is not much moving. Same with Chicago.

Dallas, San Antonio are on fire. Land is flowing like water and not lasting long.

Commerical Real Estate is Still Strong in most parts of the country but will slow down as well.

It is too early for all you "wana be" real estate players. I think we still have a year left of this down trend in prices.

You can buy low now but 90% chance that you will sell lower next year.
 
Quote from aeliodon:

I think unless you have tons of cash and can pay cash - its better to wait for lower rates and rates are already at historic lows so why miss out on this opportunity to lock in historically low rates for 15-30 years? Even Greenspam as said that rates would have to double to stop inflation. So why wait for an improbable large pullback in price if it comes at the expense of a huge increase in rates?
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Historic lows in rates was over 3 yrs ago. Current rates are above historic lows.
 
Interest rates tell you what you can buy, not when you can buy.

It's more important to research the local real estate markets then to try and forecast what effect the feds fund rate will have on the general market.
 
Quote from aeliodon:

I think unless you have tons of cash and can pay cash - its better to wait for lower rates and rates are already at historic lows so why miss out on this opportunity to lock in historically low rates for 15-30 years? Even Greenspam as said that rates would have to double to stop inflation. So why wait for an improbable large pullback in price if it comes at the expense of a huge increase in rates?

h_contract.gif
More...

Do a sensitivity in your market. Figure out what the payment would be on a piece of property you might actually buy. Then figure out what the payment would be if the interest rate went a half point either direction. Then figure out what the payment would be if the house went up or down in value.

IMHO, most of the housing price run, about 50% to 100% depending on your market occurred because mortgage rates went down about 2.5% in the short term. Now, rates have given up half that decrease, so you'd think that prices would take back half of those gains, all other things being equal. Stated another way, I think we'll see housing keep half of the gains starting from a base price of 2 to 3 years ago.

SM
 
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