Economists See More Home Price Declines Ahead

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If you can find a home that you are excited about and it is roughly 3x your annual income, buy it. If the house requires that both spouses work to fit that ratio be very cautious and look at what support systems you have if you plan on having kids.
Buying a home rather than renting space is an investment in real estate but also in the neighborhood and it's future prospects. Does the region have the vitality tfor one to be optimistic that the area will prosper in an uncertain future ?

Marc Heineman of NY 6:37PM December 04, 2010

I am a home owner for 3 years now. I am truly enjoying every moment being a home owner. I designed my newly built new home from carpet colors to tiles to the paint. I also have done all my landscaping and gardens. Its is truly a very joyful experience knowing that I have something of value to leave my children. Its so nice to come home and know that I will always have a place to go to call my own. This is the most rewarding opportunity other than the birth of my 2 children. Thank you Wyoming and our government for helping make my dreams come true !!!

Nan of WY 12:47PM November 05, 2010

Only astrologers and idiots can forecast with conviction about housing market because home prices, mortgage rates and rents are all volatile. When house prices and rents are stagnant or falling, unemployment is high and unsold homes restrict owners' job-related mobility, home ownership looks unattractive. That's why home prices are depressed and mortgage rates are low. But if you as a contrarian buy now you may be rewarded if from here the economy improves, unemployment falls, housing prices go up and mortgage rates increase. Or you can kick yourself for stupidity if economy and housing continue to weaken. Either way you have to take a call. If you are risk averse, continue to rent as long as cost of home ownership adjusted for tax benefits is higher than renting the same home.

Wiseguy of NY 3:36PM September 02, 2010

All great comments today…I like the one about renting money…I can get a loan @ 4.5%...What does it matter if the homes in my area drop 10% to 20% over the next two years…When the government stops propping up the real estate market inventory & prices will level off…

Pappy of CA 3:13PM September 02, 2010

Frankly, in this market I would not take ownership of a house even if it wwere offered gratis. Between the upkeep costs, property taxes, insurance, frozen mobility, and the uneasy feeling of being manipulated into ownership by big brother, I’ll just let others own this white elephant. Like most people I’m starting to feel like I’m being carrot and sticked into home ownership and I am reluctant to enter the market no matter how much cheese the government puts on the trap.

Observer of VA 10:43AM September 02, 2010

If you don't buy now, the US government will re-institute the tax credit to get the suckers to buy the properties at higher price from banks. BUY NOW before the tax credit is reinstated. Remember suckers paid 10% more just to get the $8000 tax credit. Remember most people are born suckers. Before the suckers bids for the property at higher price, buy now.

chuck of CA 11:52PM September 01, 2010

I totally agree with Spooked Buyer. When Rates rise in the near future, the price of the asset will drop... to a range that is affordable based on wages..2.5 to 3x income maximum. I'll buy when something I desire is 2x my income and I have 50% to put down, regardless of what rates are. People now are buying money not homes. Or better yet renting money, why not just rent the home it's so much cheaper.

Ray of NY 6:41PM September 01, 2010

I'll buy a house when the connection between how much people make and how much a house costs are in line. I'm with the previous poster. The shadow inventory scares me, and I won't buy until it is cleared.
Unemployment and underemployment are another reason I won't buy now. The only thing that is going to prop up house prices is to prop up salaries. Unless people are paid enough to pay for those houses, their prices are going to continue to decline.

Michelle of FL 5:36PM September 01, 2010

As a person who worked in banking and whose family works in real estate, I say don't buy anytime soon.
First, the shadow inventory is humongous. Banks are holding onto inventory because they don't want to depress prices rapidly. They and Obama prefer a slow burn for some reason.
Secondly, the whole mortgage market right now is propped up by the gov't. They cannot do this forever, no matter how much Obama wants to, and when they get out, you'll see the prices fall to realistic prices rapidly.

Lou in SoCal of CA 2:09PM September 01, 2010

I am a potential buyer, who has been biding my time for the housing craziness to blow over. I am not a fool to fall for cheap tricks such as the Obama tax credit, all it did was to bump up the prices.
The rock bottom interest rates and the shadow inventory spook me. When the rates begin to go up, the home prices will fall, for sure. I know that I am not going to stay 30 years in the home I am going to buy. When I may have to move in a few years (perhaps for a new job), I don't want to be underwater. That's my biggest worry. I won't buy under the prevailing conditions, even if the rate is 0%.
I don't want to be the future underwater home owner by buying now.

Rick of RI 11:46AM September 01, 2010