Comments on: The Real Dollars And Cents Cost of Waiting to Buy http://www.goodlifeteam.com/austin-real-estate/the-real-dollars-and-cents-cost-of-waiting-to-buy/ Thu, 26 Jan 2012 21:31:45 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Steve http://www.goodlifeteam.com/austin-real-estate/the-real-dollars-and-cents-cost-of-waiting-to-buy/#comment-183 Steve Tue, 16 Mar 2010 12:32:54 +0000 http://www.goodlifeteam.com/?p=3129#comment-183 I think that you may have an error in your spreadsheet...under "closing costs" shouldn't the "cost of waiting" be $7,500 not $750 if the allowable closing costs paid by the seller is reduced from 6% to 3%? ( $250K x 6%=$15,000...$250K x 3%=$7,500) All in all, a great illustration for both buyers and sellers... I think that you may have an error in your spreadsheet…under “closing costs” shouldn’t the “cost of waiting” be $7,500 not $750 if the allowable closing costs paid by the seller is reduced from 6% to 3%? ( $250K x 6%=$15,000…$250K x 3%=$7,500)

All in all, a great illustration for both buyers and sellers…

]]> By: Top 10 real estate posts of the day for 2/18/2010 http://www.goodlifeteam.com/austin-real-estate/the-real-dollars-and-cents-cost-of-waiting-to-buy/#comment-182 Top 10 real estate posts of the day for 2/18/2010 Thu, 04 Mar 2010 05:37:48 +0000 http://www.goodlifeteam.com/?p=3129#comment-182 [...] The Real Dollars And Cents Cost of Waiting to Buy – Is now really the best time to buy? What would it cost you if you [...] [...] The Real Dollars And Cents Cost of Waiting to Buy – Is now really the best time to buy? What would it cost you if you [...]

]]> By: krisstina wise http://www.goodlifeteam.com/austin-real-estate/the-real-dollars-and-cents-cost-of-waiting-to-buy/#comment-181 krisstina wise Fri, 26 Feb 2010 22:19:46 +0000 http://www.goodlifeteam.com/?p=3129#comment-181 Charlie, Kevin and Garreth~ Thank you for the adding your insights and grounding to the Blog. Your contributions made it a more complete and valuable article. I value the sharing of interpretations with other professionals that I hold in high regard in the industry. Thanks again, Krisstina Charlie, Kevin and Garreth~

Thank you for the adding your insights and grounding to the Blog. Your contributions made it a more complete and valuable article. I value the sharing of interpretations with other professionals that I hold in high regard in the industry.

Thanks again,

Krisstina

]]> By: krisstina wise http://www.goodlifeteam.com/austin-real-estate/the-real-dollars-and-cents-cost-of-waiting-to-buy/#comment-180 krisstina wise Sat, 20 Feb 2010 16:21:11 +0000 http://www.goodlifeteam.com/?p=3129#comment-180 Ryan -- Thank you for the post on my blog article. Please feel free to share it with your pending buyers who may be on the fence. Garry and I enjoyed having lunch with you last week. Garry will be in touch to show you some interesting dirt;) Thanks again, Krisstina Ryan — Thank you for the post on my blog article. Please feel free to share it with your pending buyers who may be on the fence.

Garry and I enjoyed having lunch with you last week. Garry will be in touch to show you some interesting dirt;)

Thanks again,

Krisstina

]]> By: krisstina wise http://www.goodlifeteam.com/austin-real-estate/the-real-dollars-and-cents-cost-of-waiting-to-buy/#comment-179 krisstina wise Sat, 20 Feb 2010 16:11:36 +0000 http://www.goodlifeteam.com/?p=3129#comment-179 Mr. Bubble ... Your comment is logical in that we can assume, due to economic principle, that prices will drop assuming demand drops-- due to lack of government incentives. Yes, it is possible that prices in Austin could drop, but it might be flawed to think that the savings from a drop in price will be a wash to the savings from the current government incentives. I will have to do some calculations and will post those next week, but without doing the math, I speculate that artificially low interest rates, government cash, and lower fees is a better deal for a home buyer than slightly lower prices . And, for a home seller, it is a better time to sell when there are more buyers in the market and they potentially can charge a little more for their house due to the subsidies in the market. When interest rates go up, fees go up and credits are gone, bottom line, it will be more expensive for a buyer to buy a home and that means it will be more difficult for a seller to sell. My point is: if you are planning on buying or selling in 2010 -- waiting vs. acting may not be the most prudent choice. I am certainly not trying to convince anyone to buy or sell just because the incentives exist...just not be a fence-sitter if moving is in the cards. Thank you for the post. Krisstina Mr. Bubble … Your comment is logical in that we can assume, due to economic principle, that prices will drop assuming demand drops– due to lack of government incentives. Yes, it is possible that prices in Austin could drop, but it might be flawed to think that the savings from a drop in price will be a wash to the savings from the current government incentives. I will have to do some calculations and will post those next week, but without doing the math, I speculate that artificially low interest rates, government cash, and lower fees is a better deal for a home buyer than slightly lower prices . And, for a home seller, it is a better time to sell when there are more buyers in the market and they potentially can charge a little more for their house due to the subsidies in the market. When interest rates go up, fees go up and credits are gone, bottom line, it will be more expensive for a buyer to buy a home and that means it will be more difficult for a seller to sell.

My point is: if you are planning on buying or selling in 2010 — waiting vs. acting may not be the most prudent choice. I am certainly not trying to convince anyone to buy or sell just because the incentives exist…just not be a fence-sitter if moving is in the cards.

Thank you for the post.

Krisstina

]]> By: Kevin Cottrell http://www.goodlifeteam.com/austin-real-estate/the-real-dollars-and-cents-cost-of-waiting-to-buy/#comment-178 Kevin Cottrell Sat, 20 Feb 2010 12:03:13 +0000 http://www.goodlifeteam.com/?p=3129#comment-178 Nice, accurate post about why it doesn't make sense to wait for either first time or move up buyers. Especially if their using FHA financing. I would expect things will definitely get tougher as far as requirements with FHA as the pendulum swings towards more conservative underwriting. Combine that will the Federal Reserve pulling back and ceasing purchase of mortgage backed securities in the next few months, higher interest rates are coming. Well done Krisstina and your team. You're bringing huge value to the Austin market. Kevin Nice, accurate post about why it doesn’t make sense to wait for either first time or move up buyers. Especially if their using FHA financing. I would expect things will definitely get tougher as far as requirements with FHA as the pendulum swings towards more conservative underwriting. Combine that will the Federal Reserve pulling back and ceasing purchase of mortgage backed securities in the next few months, higher interest rates are coming.

Well done Krisstina and your team. You’re bringing huge value to the Austin market.

Kevin

]]> By: Garreth Wilcock http://www.goodlifeteam.com/austin-real-estate/the-real-dollars-and-cents-cost-of-waiting-to-buy/#comment-177 Garreth Wilcock Sat, 20 Feb 2010 04:26:21 +0000 http://www.goodlifeteam.com/?p=3129#comment-177 Great article putting the changes into economic terms. I agree that there are many factors which would stimulate a buyer (or seller!) to move now - presumably these are the aims of the housing stimulus legislation. And one could see that the FHA changes are to protect the FHA from default / under-capitalization. Now that FHA loans make up 30% of the purchase market and 50% of the first time home buyer purchase market, it seems that increases in FHA loan fees / charges will impact a broad swathe of the market. As Mr. Bubble (great name!) says though, the analysis looks at the housing market being constant. I think it's very hard to predict what a rise in interest rates would do in the very short term to housing demand - will house prices continue to rise or instead drop as demand drops and things get more expensive? And there's a section of the buying pool that might well be waiting for the tax credit to dry up - single people who earn more than the income limits to get the tax credit might be best served by waiting for their $124,000-per-year-earning competition to take advantage of the tax credit and then sweep up the sellers who are left having to sell when that demand decreases. I agree that if demand is high now, then it's notionally a "good time to sell" for the same reasons that it's a "good time to buy". I think trying to time the market is hard, especially without good advice from a professional. Keep the advice and illustrations coming! Great article putting the changes into economic terms. I agree that there are many factors which would stimulate a buyer (or seller!) to move now – presumably these are the aims of the housing stimulus legislation. And one could see that the FHA changes are to protect the FHA from default / under-capitalization. Now that FHA loans make up 30% of the purchase market and 50% of the first time home buyer purchase market, it seems that increases in FHA loan fees / charges will impact a broad swathe of the market.

As Mr. Bubble (great name!) says though, the analysis looks at the housing market being constant. I think it’s very hard to predict what a rise in interest rates would do in the very short term to housing demand – will house prices continue to rise or instead drop as demand drops and things get more expensive?

And there’s a section of the buying pool that might well be waiting for the tax credit to dry up – single people who earn more than the income limits to get the tax credit might be best served by waiting for their $124,000-per-year-earning competition to take advantage of the tax credit and then sweep up the sellers who are left having to sell when that demand decreases.

I agree that if demand is high now, then it’s notionally a “good time to sell” for the same reasons that it’s a “good time to buy”. I think trying to time the market is hard, especially without good advice from a professional. Keep the advice and illustrations coming!

]]> By: Charlie Pitkin http://www.goodlifeteam.com/austin-real-estate/the-real-dollars-and-cents-cost-of-waiting-to-buy/#comment-176 Charlie Pitkin Sat, 20 Feb 2010 02:55:07 +0000 http://www.goodlifeteam.com/?p=3129#comment-176 Mr. Bubble, It actually would be nice to know what prices will do once the tax credits expire. Will they fall or remain the same? One way to predict what they might do is to compare pre tax credit prices to post tax credit prices. The original $7,500 tax credit was announced in August of 2008. The current $8,000 tax credit was announced in early 2009. Let's compare July 2008's closed numbers to September 2009’s to see if the credit had any immediate impact on what buyer's were willing to pay. In July the average sales price of a single family home in Austin was $257,946 compared to $243,686 in September. So actually the average price DROPPED ~$14,000 after the tax credit took effect. Now let's compare the numbers to after the current $8,000 tax credit took effect. July 2009's average sales price was $245,921, a $12,000 drop from a year prior. So according to these numbers the tax credit has not artificially inflated prices, and to the contrary pricing has fallen since the original tax credit came into effect. Tax credit aside, the housing affordability index (takes into account home prices, wages, and interest rates) tells us housing has not been this affordable in more than 30 years. Mr. Bubble, It actually would be nice to know what prices will do once the tax credits expire. Will they fall or remain the same? One way to predict what they might do is to compare pre tax credit prices to post tax credit prices.

The original $7,500 tax credit was announced in August of 2008. The current $8,000 tax credit was announced in early 2009.

Let’s compare July 2008′s closed numbers to September 2009’s to see if the credit had any immediate impact on what buyer’s were willing to pay. In July the average sales price of a single family home in Austin was $257,946 compared to $243,686 in September. So actually the average price DROPPED ~$14,000 after the tax credit took effect. Now let’s compare the numbers to after the current $8,000 tax credit took effect. July 2009′s average sales price was $245,921, a $12,000 drop from a year prior. So according to these numbers the tax credit has not artificially inflated prices, and to the contrary pricing has fallen since the original tax credit came into effect.

Tax credit aside, the housing affordability index (takes into account home prices, wages, and interest rates) tells us housing has not been this affordable in more than 30 years.

]]> By: Ken Brand http://www.goodlifeteam.com/austin-real-estate/the-real-dollars-and-cents-cost-of-waiting-to-buy/#comment-175 Ken Brand Sat, 20 Feb 2010 01:27:41 +0000 http://www.goodlifeteam.com/?p=3129#comment-175 Smart. Important. Generous. Nice work. Smart. Important. Generous. Nice work.

]]> By: Garry Wise http://www.goodlifeteam.com/austin-real-estate/the-real-dollars-and-cents-cost-of-waiting-to-buy/#comment-174 Garry Wise Fri, 19 Feb 2010 16:25:42 +0000 http://www.goodlifeteam.com/?p=3129#comment-174 Wow~very well written! Thank you for breaking this down into language that the layman can understand, and what it really means to the general public. Wow~very well written! Thank you for breaking this down into language that the layman can understand, and what it really means to the general public.

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