From Bloomberg:
Homebuyer Patience Triumphs in a Waiting Game: John F. Wasik
With no bottom in sight for the U.S. housing market, buyers are in game-show mode.
There are plenty of deals out there, yet you have to make some decisions if you are buying a new home. Choices flash in front of you as if a host is badgering you to decide your next move. Do you wait for prices to fall further? Or do you buy now and take the builder’s incentives or their financing?
Whatever strategy you adopt, you will need to ignore some of the bells and whistles being offered and focus on price. You don’t want to be caught buying a home today that may be marked down $50,000 next month.
With more than 4 million unsold homes on the market, the buyer with good credit and cash for a down payment can do well.
Builders are doing whatever they can to move properties. In February, almost half surveyed said they cut prices, according to the National Association of Homebuilders, a Washington-based trade group. More than half “reported offering optional items at no charge and 44 percent said they paid all or some of the closing costs.”
Itching to buy? Let’s say you are considering a second or vacation home. You are confident that the market has bottomed and you don’t want to miss out on the best prices.
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Playing the waiting game? If you delay your purchase, you may be rewarded. Home prices are forecast to fall 12 percent this year, according to Richard Syron, chief executive officer of Freddie Mac, the second-largest provider of money for U.S. home loans. Housing starts may plunge 22 percent in 2008 and remain at their lowest level in 16 years, he said in a speech to the homebuilders association on Feb. 13.
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Prices are going to fall a lot more than Freddie Mac’s forecast 12 percent in the most overpriced areas, which may experience 50 percent declines or more.Patience is a virtue in this market. It will also net you a better deal if you can turn off your game-show impulses.
Patience. shoot for 2002 prices.
Be demanding and don’t give an inch.
Solid credits are in high demand.
30% off of peak prices.
Go for it!
BOOOOOOOOYAAAAAAAAAA
Bob
No end in sight? BS! Hovnanian called bottom for the end of 2008. Buy now or be priced out forever!
wait until 2010 for 2002 prices. I can see it coming. who ever suggesting to buy now is a seller with his home on the market for > 180 days !!
How about some comments/forecasts/thoughts/insights on the pace of decline in the coming 12 months. My family needs a bigger place. I don’t want the hasssle of moving twice. How long will I have to wait for the bottom to drop out. The sellers seem to be holding out. Will prices drop early in the spring when there is it becomes obvious supply outstrips demand? will it take through Q3 and the summer selling season is over?
What will be the catalyst driving mass capitulation among sellers?
at least 18 months. Expect 15% decline for sure.
“What will be the catalyst driving mass capitulation among sellers?”
You don’t need “mass” capitulation. The prices are set by the those that have to capitulate because they need to sell.
Is it unethical for a buyer to have a friend in a low ball offer ahead of his, to get the seller to lower their expectations?
After all the seller sets an unrealistic selling price to inflate the perception for buyers, despite the fact that they have no thought of ever achiveing that price, (not to mention the relisting game Grim pointed to)? Is there this a fair tactic in the buyer-seller game perception/deception game?
Jay
There are resets but in markets where there hasn’t been a surge in recent purchases and therefore there are only a small percentage of mortgage resets that are likely to force owners into foreclosure what will drive that decline in the near term. I have no doubt prices are coming down but I can’t wait 24 months or even 10. I’ve got school aged kids who would have a hard time adjusting to a school change mid-year. I need to move before September.