Are You Speculating Home Prices?

First of all, this is not a “Paint pretty roses on my canvas” type of post to encourage on-the-fence homebuyers to act. It is my personal view first as a person and a homeowner, not so much coming from a Realtor(R) perspective.

I have worked with a few on-the-fence buyers for a while. A few that just wants to see how much lower it would go. A few that just wants to buy at the absolute bottom. There is nothing wrong with that. In fact, I wished I could do that myself too.

However, you have heard me say this far too often. Real estate is local. Local to communities, local to cities. It is also local to price points too. The “first time” home buyer, smaller homes perhaps less than $150-$160K here in the Frisco TX real estate market did not get “hurt” as much. Some clients that I work with actually gained equity even though they purchased 4 years ago. Looking back at historical data, we could almost say that 2004-2006 was perhaps the peak of the market prices here in Frisco.

All of these foreclosure talks are somewhat relative. Many people are foreclosed on today because they perhaps have put very little down, gained no equity in 4 years and now are suffering financial difficulty on top of a bad market condition.

Home prices may not go up very much but they don’t go down very much either, at least not for our Frisco TX real estate market. We are not California or East Coast where we had the roller coaster rides of the real estate market. Our Frisco TX homes were never bought for $200K yesterday, then worth $300K 6 months later, then $140K with no takers another 6 months down the road.

I cannot promise you that if you bought your house today, that it may not go down more. Though $5-$10K seems alot, again we are talking about time value of money and especially with the favorable interest rates less than 5% for a 30-year and 4.25% for a 15-year note today. It is not less than $50 more per month that we are discussing about? How about the pride of homeownership? Something you can call your own? A wall color you can paint just because you can?

If we ever keep holding out for market conditions to turn, we are speculating. Yes, gamblers of the real estate market. Taking a chance on the real estate roulette wheel. Personally, a home for your family should never be viewed that way. And I’m saying all this not as a realtor(R) who’s trying to paint a positive picture. I am first a person and a homeowner who wants my home to be a blessing to my family. Though a house is an investment, it is first a refuge for my family. A roof over our head. Sure, I wouldn’t ever want to see the values fall. But who can tell me that this is how low it would go, or how high we can see?

Back to how I always answer if Now is the time to purchase? Buy it when you are financially and emotionally ready. I’m not saying Let’s not care about the market conditions but sometimes in life, we can’t win it all. We got to give a little to take a little.