Is it still worth buying a home if the value of the area is set to adjust downward?

Question

I hear a lot of people in the Michigan area say that owning a home (sub $200k) is still a better bet than renting, even if property values are sliding. Can anyone justify this idea?

Answer 1

If you can rent for X and you can be an owner for X then buying makes good sense assuming you have no reason for selling for a long time. The costs associated with buying and selling can be significant, hence the need to own for a while.

If you are paying down the mortgage but paying the same as renting then you are ahead.

Be very careful to include all costs. If you are renting you do not have maintenance, taxes, insurance and other misc costs. As the owner you do.

If the property never went up in value but you paid off the mortgage you can still be ahead. If you are in a declining market you have to ask why the values are declining. Will it stop at some point or will the area never really recover?

Answer 2

Over the long term the value will appreciate. If you see a home you really like then buy it now. Too many loose the chance by waiting. Someone else comes in and buys while they are waiting for the market to decline some more. Keep it for 7 to 10 years and you will be ahead.
Good Luck

Answer 3

Well if you like the house and its a nice neighboorhood and you plan on staying there and not selling the house later on then, yes it would still be worth buying it. But if you are planning to buy it and then sell it again in the near future, then its probly not a good idea to buy it in the first place. You will end up losing money then gaining any at all.

Answer 4

Been a home owner is ALWAYS a good investment even in a downturn market because factors may change to creta an upswing......if you are looking to buy a primary residence and hold it for seevral years, buying in a downturn market is actually better for you......