Thorner's Asking The Right Question
You gotta like James Thorner's (Un)Real Estate column in the St. Petersburg Times. It's always interesting, always timely, and almost always has the right answers.
The column for Monday, November 5, gets right to the heart of the matter. Thorner asks if this is a good time to buy a house.
Thorner writes that real estate agents are saying "yes, it's a great time to buy", but points out that agents may have a vested interest in the answer.
So, Thorner goes to some other sources like Jan Hatzius, an economist at Goldman Sachs. Hatzius thinks Florida prices could drop another 30 to 40 percent and the slide could last another two years.
He goes to the S&P/Shiller-Case Home Price Index. The Index ranked Tampa as the worst nationally for home price decline, and the fall in home prices shows no sign of letting up.
Then he goes to Lawrence Yun, the newly appointed economist for the National Association of Realtors, who has predicted several poor months ahead.
Gadzooks! No wonder buyers are sitting on their hands and waiting for prices to fall even farther.
But here's the factor nobody seems to want to put into these discussions: What is the reason to buy the property?
If you are buying for quick investment -- as many people did in the last few years, hoping to put in a new kitchen, a bathroom, re-pave the driveway and then make a fast $100K -- this is probably not your best time to buy. I think those days are over for right now. No quick hits out there, are darn few anyway.
On the other hand, if you're buying to give your family a new home, this is probably a really good time to buy. If you're going to keep that house for five years or more, it's probably an excellent time to buy. What do you care if the "paper" price of the house drops a little in the next year or two? You aren't going to sell it. It's home. Five years from now, it will likely be worth more than you paid for it.
What if you're buying for a long-term investment, going to use the property as an income source and hold it for a long time. Well, you're in the same boat as our long-term home buyer. The property may lose value in the short run, but its value will increase in the long run.
So you see, trying to determine if this is a good time to buy depends largely on the motives and time frame of the buyer. In the long run, real estate values -- like the stock market, James -- have always gone up.
I'd be willing to bet that if you buy today, in three to five years you'll be thanking your real estate agent. If you don't buy today, in three to five years you'll be kicking yourself.
For more information about real estate in the Tampa Bay area, visit my website, http://www.thestpeterealestatesite.com/.
The column for Monday, November 5, gets right to the heart of the matter. Thorner asks if this is a good time to buy a house.
Thorner writes that real estate agents are saying "yes, it's a great time to buy", but points out that agents may have a vested interest in the answer.
So, Thorner goes to some other sources like Jan Hatzius, an economist at Goldman Sachs. Hatzius thinks Florida prices could drop another 30 to 40 percent and the slide could last another two years.
He goes to the S&P/Shiller-Case Home Price Index. The Index ranked Tampa as the worst nationally for home price decline, and the fall in home prices shows no sign of letting up.
Then he goes to Lawrence Yun, the newly appointed economist for the National Association of Realtors, who has predicted several poor months ahead.
Gadzooks! No wonder buyers are sitting on their hands and waiting for prices to fall even farther.
But here's the factor nobody seems to want to put into these discussions: What is the reason to buy the property?
If you are buying for quick investment -- as many people did in the last few years, hoping to put in a new kitchen, a bathroom, re-pave the driveway and then make a fast $100K -- this is probably not your best time to buy. I think those days are over for right now. No quick hits out there, are darn few anyway.
On the other hand, if you're buying to give your family a new home, this is probably a really good time to buy. If you're going to keep that house for five years or more, it's probably an excellent time to buy. What do you care if the "paper" price of the house drops a little in the next year or two? You aren't going to sell it. It's home. Five years from now, it will likely be worth more than you paid for it.
What if you're buying for a long-term investment, going to use the property as an income source and hold it for a long time. Well, you're in the same boat as our long-term home buyer. The property may lose value in the short run, but its value will increase in the long run.
So you see, trying to determine if this is a good time to buy depends largely on the motives and time frame of the buyer. In the long run, real estate values -- like the stock market, James -- have always gone up.
I'd be willing to bet that if you buy today, in three to five years you'll be thanking your real estate agent. If you don't buy today, in three to five years you'll be kicking yourself.
For more information about real estate in the Tampa Bay area, visit my website, http://www.thestpeterealestatesite.com/.
-30-
posted by Terry Ward at 5:45 AM
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