Not long ago I wrote my thoughts on real esate and where I thought we were headed. I articulated my concerns and researched data to support my arguments. However, I have come across a lot of individuals and propaganda that tell me “Oh no, Kate, now is the best time to buy.” Since I like buying things (shopping is one of my favoriate past times afterall) and I have been wanting to do more real estate investing (REI), I started to wonder if maybe they were right. Maybe I was wrong. Maybe we had hit the bottom. So tonight I went ona quest to uncover some numbers and determine if it really was a good time to buy.
No, it is not.
Here is some information I found:
* Caveats: Keep in mind for those readers not in Seattle, most of of my research us for this area and surroundings–and like all decisions, it is your job to do research and make the best decision for yourself–my ideas may or may not be inline with your parameters
- There is another large wave of mortgage resets heading to Seattle. From the article: about 12,600 loans are scheduled to reset in the next 6 months (which is 52% of the remaining sub-prime loans). This could mean more foreclosures, lower prices, and more inventory–especially if these people cannot refinance their loans (because of lower house prices or stricter lending standards).
- People are starting to come to the realization that Washington and Seattle are not exempt for the rest of the US economy. Our local economy is slowing down, commodity prices are on the rise, the housing market is seeing a big growth in inventory, and salary increases aren’t keeping up with inflation. This means that as recessionary fears and a slowing economy affect consumers people are likely to spend less and make big purchases (such as a new home).
- Housing prices are declining. August showed the first month of double digit percentage drops in home prices year over year (11.2%, with a media price of $423,950). This means that some homes may not be able to be refinanced. The NWMLS claims that a lot of the decrease in sales and increase in inventory is the tighter lending standards.
All of the aforementioned factors help support the theory that prices are going to continue to decline. There is no indication that the market has hit bottom and is making its way back up. So if you are thinking of buying it is still best to wait and keep saving up that money for a down payment for a home in a year, two years, or maybe more.