New Home Purchase

Advice on whether or not its a good time to buy a new home?  All the professionals in the fields of real eastate and the market, etc. please throw in your 2cents (:

Thank you

Rates are good, market prices will be dropping a ton soon

I'd consider the following 3 items: Price, interest rates, uncertainty.

Prices are extremely high.  Home prices have not been affected by the pandemic yet.  Very high chance we are headed into a recession which will most definitely affect prices.  To state the obvious if you buy now and prices do fall then you bought at the height of the market.

Interest rates are at historic lows, but they've been around these levels for years now.  If anything they will go slightly down with everything that is going on.  I wouldn't rush in to a purchase just to get a good interest rate.

I'd say the biggest factor is uncertainty.  In the end all of the politicians, people on TV, and others making predictions don't know when or how this will all end.  Is buying a home during an unprecedented time in our nations history a great idea?  Is there any advantage to doing it right now?  Wait a couple months and see how this all plays out.  If everything goes back to the way it was before make the purchase then and you most likely didn't lose anything.

As requested these are just my 2 cents.  I'm not a real estate professional, but I do own a couple investment properties and have a bit more experience in the real estate market then your average non-professional.  Good luck with your decision.

Depends where you're looking. Ina market like Denver, inventory is still low and probably will stay that way.

Prices are high, but interest rates are as low as they're probably ever going to go. If you've got solid job security through this thing, I'd buy. 

This is all good stuff.  

location location location

I'm looking to buy now. The inventory is very low right now and there are a lot of buyers so if something good goes on market it's usually gone within a few days, with a purchase price way above asking. A lot of buyers that we've been competing with are also willing to take on more risk with their offer. I don't know exactly how to explain it, but theirs a clause in their offers where they are willing to make up the difference in appraisal and loan price if the house appraises lower than what they're paying for it, and we simply don't have the cash to take that risk. Especially if there is a bidding war and the sale price is way over listing. We're looking in Longmont but I've heard from friends across the front range it's the same story, fort collins to Colorado springs. If you have tons of cash and are willing to pay for more than it may be worth, you can give a pretty attractive offer. If not you better be patient.

Just bought one at a low interest rate. However we closed just before the stay at home restrictions. The biggest thing is the closed stores and the lack of convenient contractors to hire. Not alot of people are selling though.

Stiles, all real estate is local! Since you posted in the CO forum and your location is "in the mountains" I'm guessing you are in or near a resort town? These towns have unique real estate markets since you are competing with investors and second home buyers as much as homeowners. These are generally owners who can buy and hold so price drops may be slower. I also wonder if the current social distancing will create a bit of pent-up demand. From a pure investment perspective I would wait a bit to see if prices come down and inventory creeps up - I don't think interest rates will go up significantly for a long time.

All that said, if you are looking for a place to call your own and are ready to commit to an area for 10 years, I would look at what's currently for sale, keep an eye on every new listing that comes out, and the perfect deal may present itself. I hate to bash real estate agents, but most of the agents I've worked with are really self-serving - their raison d'etre is to make a sale as quickly as possible. I would let everyone you know that you are in the market. If you can do a deal without paying realtor commissions both parties will save thousands.

Are you making a significant down payment (20%)? Housing price will likely be a lagging indicator:

If economy makes a reasonably fast recovery, then it's unlikely places w/ tight supply (like front range) will take a large dip, but it also means the stock market will make an even faster recovery and you should make your existing money work.
If economy goes into a more prolonged dip, then housing price will eventually decrease.

In either case, interest rate will remain low until the economy is almost fully recovered (and possibly beyond).

I wouldn't really take advise from real estate professionals b/c they have the wrong incentives.

Seeing a lot of front range folks on here so FYI - I’m Selling a 1 br/1bath condo in downtown Denver if anyone is interested. Happy to give mp folks first dibs before putting it on the market. 

Home prices seem to be a lagging indicator.
Inner city property generally falls first & recovers first. When rural property falls it really falls. If you are buying a home and it's in your price range and you will be happy living there for an extended amount of time no matter how low the value falls, and no matter what happens you will be able to make the payments BUY.
If you are buying as an investment hold off. Unless you need future tax write offs. 

I live in SW Colorado. Found a quality place l like.  10% down payment.  Cant swing 20%, unfortunately.  Here long term, first homebuyer.  

Thanks a lot for all the different insight!

Negotiated for $15k less than asking, sans realitor.

We have gone as low as looking for Real Estate advice on a climbing forum .....

Lets take a basic economics test from HIGH SCHOOL.

Question 1. Boomers die from coronavirus. The supply of homes on the market:
a. goes up
b. remains the same
c. goes down

Question 2. From Question 1, the price of homes:
a. will go up
b. go down
c. remain the same

Question 3. Rates. What was the last time the fed funds rate was above 2.5%?
a. Never
b. 2007
c. 2018
d. 1999

Wait 3 - 6 months minimum.  Interest rates aren't going anywhere.  You'll be glad you did.

To be fair, l have quit posting while pooping, and only write while on the hangboard

this is probably the worst time to buy a house. We are likely at the top of the market cycle. Unless the market you are looking at is immune to the likely coming drop, or you really want your own home for the long term, have a recession proof job, and can wait out the likely coming downturn and eventual increase in prices.

No one knows what will happen. But I’m guessing we are headed for a recession. Which is Two quarters of declining GPD. When the numbers for GDP and unemployment come out I think they are going to be huge and the stock market will react by dropping lower than recent lows. 

Housing markets are local, so you need to think about how your market will react. Many markets that have big swings up and down will drop. If people don’t have jobs or lost money in the markets they’ll not be buying limiting demand and prices will drop. Right now people are not doing much so people aren’t listing their houses and the supply is low which may keep prices up. But I’ve seen prices dropping in several markets.

If you put down 20% you don’t  have to pay mortgage insurance, otherwise it may be smartest to put the minimum down. E.g. 3.5% for an FHA loan. That way if you lose your job or prices drop and you’re really underwater you can get out of the house without losing too much money.

As a buyer you usually have the power when in escrow. You can choose to withdraw for any reason mentioned as a contingent in your contract. If prices start dropping you can’t say you are withdrawing for that but you can say it’s needs more work than you expected. You don’t want to be a dick but don’t feel bad about protecting yourself.

There is plenty of good information on this thread so I'm going to drift a little here.
I did not go to much high school. I don't remember any economics classes in high school.
I do have a high school diploma. it was given to me for work experience.
I was raised by a single father that believed school was wasted on men. He felt men should go to work and learn there.
I am is only son & he taught me a lot about businesses.
On the other hand I have a lot of sisters & he demanded they go to college.
His reasoning was that a woman should never need a man for financial security.
They should be well educated and be able to afford the man they want.

If you wait a year or two for 2 million boomers & older to perish from Covid-19 and for their estates to emerge from probate, I predict you'll find some pretty good deals...