Milwaukee Condo & Real Estate Scene

JSOnline: Wannabe buyers wait as home prices fall - Some experts fear those trying to time market could end up hurting themselves

Meet Kurt. Kurt is a potential real estate buyer in today's buyers market. In many cases, Kurt resembles many of the buyers I am currently working with. Kurt is actually waiting and hoping to see if the real estate market gets worse. He, like many buyers who were priced out of the real estate market during the last housing boom, spends a great deal of time reviewing real estate advertisements and newspaper articles to determine if the market has hit rock bottom and to determine if it's time to purchase his new home.

Like Kurt, many of today's buyers are trying to time the market to take advantage of the best available deals. Experts warn that this can be risky because we don't know with certainty how long this slump will continue.

There are many reasons why attempting to time the market can cause problems for buyers, including:

* Interest rates may rise. A one point increase in the interest rate could add $21 to the monthly payment ($252 annually or $7,560 over the term of the loan) for a $250,000 mortgage.

* Timing the bottom is impossible. If the floor in the real estate correction is occurring right now, you have already missed it. Market conditions can change quickly and unexpectedly.

* Lenders are tightening standards, which might make it more difficult or expensive for some people to secure financing in the future.

Although I appreciate that today's buyers are trying to get the best deal for the money, the fact is, the longer they wait, the greater the risk of being priced out of the ideal home due to financial economic forces.

According to JSOnline, Bruce Norris, of real estate investment company The Norris Group, said now might be the best time to purchase a home, if the buyer plans to live there for 10 years. "I'm not sure that I wouldn't rather pay today's price with today's interest rate than count on a big discount and the wild card that interest rates might be very different," Norris said.

This article also compares real estate markets in a number of metropolitan areas throughout the country. See how these metropolitan areas are faring in this buyers market.

Alex Veiga, writer for the Associated Press, writes more about the risk today's buyers are taking to time the real estate market. Click here to read the entire article>>>


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Labels: Finance

posted by David Ray @ 9:18 AM