Is it safe to buy a house in the current market?

Question

Is it safe for a first time buyer to purchase a house at the moment? Interest rates have just gone up and some people are saying they are expect to go up again soon. If house prices dropped would I be up a certain creek without a paddle?

Answer 1

You have two obvious courses:- Rent or Buy. If the market dips and prices fall it will last two years. But you want somewhere to live. If you pay out say £500 per month renting it will cost you £12,000 over two years. If you Buy, you may be caught with a further definite interest rate rise during the period; Your type of house, just say £160,000 would fall by say £10,000 But you will not have lost £12,000 Rent.
Another factor, is that there is said to be a shortage in the housing stock.
If I were you I would just see if prices show any downward movement in the next 2/3 months and make a shrewd purchase then. There would not be any material difference in your outlay whichever way you go.
I am a retired banker. I would wet my right index finger and hold it up to the wind and then say . . . . . What's the point, I'm going to buy.

Answer 2

Is it safe? The biggest question is it for you to live in? If so you have to live some place. Another thing that is not known is where you live and what the houing market like. Some areas are still going up some have already bottomed out and may see a slight rise this year and others may still drop some more. If everyone know what would happen then everyone would have made millions the last 5 years in real estate. I work with investors and they are still buying in Florida. Maybe not south florida but still in florida. The are still good buys in south florida but you have to do your home work and look for them. But if this is for you to live remember it's location, location, location. Don't forget the tax saving you gain from your home too. Also ask yourself if interest rates rise and real estate doesn't go down anymore can you afford you home?

Answer 3

The questions you must answer regarding buying a house now have to do with the following: a) Can you afford the payments, both now and in the future? b) Can you live with yourself if prices do drop a great deal in the next few years?

Many real-estate pundits do believe that house prices will drop some more over the next 2-3 years, with varying opinions over how much, anywhere from 5% to 30%. Therefore, buying a house as an investment to resell within the next 5 years is probably a bad idea, as it is likely it will be worth less than you paid for it.

So, buy a house now only if you want it as a residence, and you plan to keep it for the next half-decade at least. And, get a fixed-term mortgage. Those variable-rate mortgages are just bait-and-switch manipulations that many people learn too late that they cannot afford.

My final bit of advice is to NEVER get advice on real-estate from people who work in the real-estate business, including real-estate agents, real-estate bankers/underwriters, brokers, and anybody else who works on the inside of the industry. This includes most journalists who write about real estate. Get your info from knowledgeable people on the outside, like economists, bankers, and people who say things that you don't necessarily want to hear.

To give you some background on me: I live in Oklahoma City, OK, in a neighborhood where the houses are valued at the top 5% in the metro (it's a nice, large, modern home). I am renting, and my landlord has the house up for sale. He mistakenly bought it thinking he could sell it at a good profit. The estimated value of the house, which has not sold in six months of listing, has gone down about 12%. About 30 people have looked at it and another 40 have called. Everybody who has anything to say, says that the home is overpriced, although several comparable homes in this neighborhood sold for more money last year. The experience of having real estate agents call and visit has only worsened my opinion of them. There have been several bank repo auctions of homes in the vicinity in the past 90 days, with homes selling for 20% to 50% of their retail value (one home, a 5-year old brick home, 3br/2ba w/ garage, went for $30,000). You might look into bank auctions to buy a home.

Answer 4

My advice would be to steer clear of homes that are currently priced too high and refinance when interest rates drop.

I bought a condo outside of my preferred neighborhood, because it was priced in reality. My place's value increased by 45 grand in the first year. So real estate is a great investment and much better than renting.

But beware of creative financing. Especially with rising interest rates. Just try and get into something that you can afford and that you can turn over in a couple of years.

That's my goal this year, to trade up to something larger. And I'll be able to afford it because of my equity.

Good luck.

Answer 5

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Answer 6

Property is always a good investment, long term. However it is really hard to say whether or not it is a good short term investment at present. If you do decide to buy, make sure you find somewhere you think you could live in for a good few years. Don't borrow more than you think you can comfortably pay back, get a repayment mortgage not an endowment, and try to get a fixed interest rate.

Answer 7

I think for certain area's it is a good time to buy. Like expensive place's that have had big price drops, but are in good area's (Calif). They will slowly go back up again because people will always want to live there. Get in while rate's aren't outrageous and price's are OK. If they go down a little they'll go back up eventually. When they go back up, you might no be able to get in!

Answer 8

It would only be a problem for you if you are expecting to sell soon. If you are looking for a home the lower interest rate would be better for most first time buyers.

Answer 9

confident, that's secure to purchase a house in the process the marketplace disaster. a house is likely considered one of the main secure places to place your earnings a international financial disaster simply by fact the investment is tangible and could continually have fee. different investments can actual bypass all the way down to 0. Secondly, that's a reliable time to purchase a house simply by fact the housing marketplace may be close to the backside and rates of interest are nonetheless low. there have been greater fortunes made by human beings who started on the backside of the marketplace in assessment to thiose who've started on the precise of the marketplace.

Answer 10

Buy a house as a long term investment and somewhere to live and you will not go wrong. The market fluctuates but it always grows given enough time.