IF YOU ARE BUYING A HOUSE....
FH and I have been going back and forth with buying a house or renting an apartment. It's been super crazy....but I think we decided on renting for now. Something that kinda helped us was reading this
WALL STREET JOURNAL
HOME-PRICE OUTLOOK TAKES ANOTHER HIT
By James R. Hagerty
From The Wall Street Journal Online
The outlook for house prices is getting even gloomier as traders on the Chicago Mercantile Exchange bet on steep price declines and the number of homes for sale grows.
More
The pace of rent growth in the nation's office buildings slowed in the third quarter. See related story.
The number of homes for sale continues to mount, putting downward pressure on prices.
See detailed chart.
Traders on the CME expect home prices in 10 major cities to drop an average of about 10% from mid-2007 to November 2011, according to an analysis by Tradition Financial Services Inc., New York, of prices for housing futures traded on the exchange.
The contracts have been trading since May 2006 but last month were adapted so that traders could bet on prices as long as 60 months into the future. The trading is based on expected movements in the S&P/Case-Shiller house price indexes.
Trading is very light so far -- about 20 contracts a day, a CME spokeswoman says. That means the contract values provide only a rough idea of the expectations of speculators and people hedging against house-price risks, says Anthony B. Sanders, a professor of finance at Arizona State University. But Dr. Sanders says the contracts are a useful signal, and he expects house prices generally to fall in the next couple of years.
'There are too many houses coming onto the market [in many areas], and the demand is just not there at current price levels,' he says.
The current contract prices show that traders expect prices in the Miami metro area in November 2011 to be down 28% from the mid-2007 level. (The indexes cover metro areas as defined by the U.S. Census Bureau.) The expected drops in other metro areas for the same period are 18% for Las Vegas, 12% for New York, 19% for San Diego, 26% for San Francisco and 13% for Washington, D.C.
Meanwhile, total listings of homes in 18 major metro areas at the end of September were up 1.2% from a month earlier, according to figures compiled by ZipRealty Inc., a real-estate brokerage firm based in Emeryville, Calif. The data cover listings of single-family homes, condos and town houses on local multiple-listing services in areas where ZipRealty operates.
Inventories at the end of September were up about 18% from a year earlier in the 17 metro areas for which comparable figures from September 2006 were available.
The ZipRealty data don't include the New York area. But Jonathan Miller, research director of Radar Logic Inc., New York, says there were 5,490 cooperative apartments, condominiums and town houses on the market in the Manhattan borough of New York City at the end of September, up 12% from August but down 32% from September 2006. Mr. Miller expects prices for typical Manhattan residences to be flat to modestly higher over the next year.
Adding to the downward pressure, lenders are warier of appraisals and are rejecting more of them as too high, says Philip Tirone, president of Mortgage Equity Group, a mortgage brokerage firm in Los Angeles. 'That's making appraisers gun shy,' and more inclined to appraise conservatively, he says.
That said, FH and I were the couple that insisted that renting was a waste of money. At the end, you have nothing to show. Now, no one has the ability to definitevily predict with 100% accuracy, the outcome of real estate in the upcoming years. However, the WSJ is a reliable source, and generally their real estate information is credible and reliable. (bottom line: they may be on to something).
Let's say they are right. I am no math genius, but if you purchased a home for $450K (to make the numbers easier for me lol), a 10% decrease would mean that if you rent, you could've saved yourself around 90,000. Say it takes 2 years for that decrease, that means a 2,000/m rent would've cost you $48,000, so you still made out saving $42,000. Get where i'm going?
I'm sure there are plenty of you out there who def. want to buy (my sister just went to closing on her house in ronkonkoma), some who want to rent, and others who are on the fence like myself and FH. If you are on the fence, maybe try renting. Maybe it won't be such a waste of money afterall.
Like i said, this is not a crystal ball, but based on current trends, this is what they are thinking.
WALL STREET JOURNAL
HOME-PRICE OUTLOOK TAKES ANOTHER HIT
By James R. Hagerty
From The Wall Street Journal Online
The outlook for house prices is getting even gloomier as traders on the Chicago Mercantile Exchange bet on steep price declines and the number of homes for sale grows.
More
The pace of rent growth in the nation's office buildings slowed in the third quarter. See related story.
The number of homes for sale continues to mount, putting downward pressure on prices.
See detailed chart.
Traders on the CME expect home prices in 10 major cities to drop an average of about 10% from mid-2007 to November 2011, according to an analysis by Tradition Financial Services Inc., New York, of prices for housing futures traded on the exchange.
The contracts have been trading since May 2006 but last month were adapted so that traders could bet on prices as long as 60 months into the future. The trading is based on expected movements in the S&P/Case-Shiller house price indexes.
Trading is very light so far -- about 20 contracts a day, a CME spokeswoman says. That means the contract values provide only a rough idea of the expectations of speculators and people hedging against house-price risks, says Anthony B. Sanders, a professor of finance at Arizona State University. But Dr. Sanders says the contracts are a useful signal, and he expects house prices generally to fall in the next couple of years.
'There are too many houses coming onto the market [in many areas], and the demand is just not there at current price levels,' he says.
The current contract prices show that traders expect prices in the Miami metro area in November 2011 to be down 28% from the mid-2007 level. (The indexes cover metro areas as defined by the U.S. Census Bureau.) The expected drops in other metro areas for the same period are 18% for Las Vegas, 12% for New York, 19% for San Diego, 26% for San Francisco and 13% for Washington, D.C.
Meanwhile, total listings of homes in 18 major metro areas at the end of September were up 1.2% from a month earlier, according to figures compiled by ZipRealty Inc., a real-estate brokerage firm based in Emeryville, Calif. The data cover listings of single-family homes, condos and town houses on local multiple-listing services in areas where ZipRealty operates.
Inventories at the end of September were up about 18% from a year earlier in the 17 metro areas for which comparable figures from September 2006 were available.
The ZipRealty data don't include the New York area. But Jonathan Miller, research director of Radar Logic Inc., New York, says there were 5,490 cooperative apartments, condominiums and town houses on the market in the Manhattan borough of New York City at the end of September, up 12% from August but down 32% from September 2006. Mr. Miller expects prices for typical Manhattan residences to be flat to modestly higher over the next year.
Adding to the downward pressure, lenders are warier of appraisals and are rejecting more of them as too high, says Philip Tirone, president of Mortgage Equity Group, a mortgage brokerage firm in Los Angeles. 'That's making appraisers gun shy,' and more inclined to appraise conservatively, he says.
That said, FH and I were the couple that insisted that renting was a waste of money. At the end, you have nothing to show. Now, no one has the ability to definitevily predict with 100% accuracy, the outcome of real estate in the upcoming years. However, the WSJ is a reliable source, and generally their real estate information is credible and reliable. (bottom line: they may be on to something).
Let's say they are right. I am no math genius, but if you purchased a home for $450K (to make the numbers easier for me lol), a 10% decrease would mean that if you rent, you could've saved yourself around 90,000. Say it takes 2 years for that decrease, that means a 2,000/m rent would've cost you $48,000, so you still made out saving $42,000. Get where i'm going?
I'm sure there are plenty of you out there who def. want to buy (my sister just went to closing on her house in ronkonkoma), some who want to rent, and others who are on the fence like myself and FH. If you are on the fence, maybe try renting. Maybe it won't be such a waste of money afterall.
Like i said, this is not a crystal ball, but based on current trends, this is what they are thinking.
