>>Oh, come on. You’ve got your head in the sand, man. Listen to all the investment advice on these threads. Hold onto that home until “times get better.”<<
In all seriousness, I don’t know if you are being serious or sarcastic.
I will say this: If I owned a home I wouldn’t sell unless relocating. But if I was a renter, I’d be a fool to enter now.
I don’t know if I would call anyone buying a home now a fool. I would say they are premature, impatient and are jumping in too soon, and they could probably save money by waiting two to 4 years.
There is just NO HURRY to buy a home today, financially. Emotionally, there is justification. Financially, there is not. Prices in most regions/neighborhoods are going nowhere but down, so why jump. Only a few regions/neighborhoods will see appreciation. Others should wait.
The only reason I can’t call someone buying a home today a fool, is that interest rates are still low. Prices are down (at least here in California they are down) and those who have resolved to sell are pricing their homes below peak. I think they are still priced too high, but today’s buyers are not going to get killed on depreciation, like those buying in 2005 and even 2004.
It is possible that those who buy today and keep their homes 30 years at a fixed 6.5% interest rate may actually do better than someone who waits to buy at the bottom price, but pays 10% interest, if rates never fall below that in their lifetime. Just saying, this is the only scenario I can see where the best financial move is to buy now.
Otherwise, you are right. Financially, if you can get a 30-year fixed loan at 6.5% on a $250,000 home today or the same home in the same place for $205,000 in 4 years, then those waiting saved themselves about $50,000 and are paying less in property taxes. When both homes appreciate in the next boom, the guy who waited will have more net worth than the guy who bought now.
Still, prices are down and if people want to buy now because they need a roof for their family, and plan to stay years and years — then what the heck.
But I agree that anybody buying a home today in a bubble city is being impatient and is throwing away some money by buying now, rather than waiting for the same homes to come down another 10-20% in price.