Why 2008 may be the best year to purchase a home
With interest rates still at historic lows, home buyers have the opportunity to purchase a home at today’s low interest rates. Why would you want to purchase a home if you think prices may decrease further? For approximately every 1% increase in mortgage interest rate, you will need a 10% drop in property values to afford the same monthly payment. The question becomes: "How much more do you realistically believe prices might drop? AND how much do you think interest rates will increase, after the Presidential election, perhaps by next Spring? 
Did you read the above? "The 1970's increases were related to an economic downturn and the OPEC crisis" - Does this sound familiar? "The 1980's spike was a consequence of stricter monetary policy and a correction in economic over-production".
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If you want to buy or sell a home, call me – let’s make it happen before interest rates increase. 
Read my previous post pertaining to interest rates, home prices and how rate increases impact your monthly payment.
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9/17/2008 10:00 AM
Los Angeles Real Estate Blog wrote:
I want to purchase a home because: *I am tired of moving *I need a tax break *I want a place to call my own, one I can personalize to my taste I need to wait to purchase a home because: *Prices are going down and they will be giving Los Angeles homes away*Interest rates are going to fall below the 5’s *My parents/boss/guru tells me I should wait The time to buy is when you think it is right! Do your research and if I can help call me! ... -
9/16/2008 6:21 PM
Los Angeles Real Estate Blog wrote:
I want to purchase a home because: *I am tried of moving *I need a tax break *I want a place to call my own, one I can personalize to my taste I need to wait to purchase a home because: *Prices are going down and they will be giving Los Angeles homes away*Interest rates are going to fall below the 5’s *My parents/boss/guru tells me I should wait The time to buy is when you think it is right! Do your research and if I can help call me! ... -
8/25/2008 6:27 PM
Los Angeles Real Estate Blog wrote:
There are numerous reasons to buy a home in 2008, and many reasons to not buy. An argument can be made for either decision; and only time will tell which was the correct choice. I believe your home is your home, not an investment. It's great when you make money on your home, but primarily it is your refuge. I know many who disagree, they buy, spruce up, sell and cash in on their $500,000 capital gains exclusion and move every two or so years. I suppose that is a job of sorts, but my house ... -
8/24/2008 11:37 AM
Los Angeles Real Estate Blog wrote:
There are numerous reasons to buy a home in 2008, and many reasons to not buy. An argument can be made for either decision; and only time will tell which was the correct choice. I believe your home is your home, not an investment. It's great when you make money on your home, but primarily it is your refuge. I know many who disagree, they buy, spruce up, sell and cash in on their $500,000 capital gains exclusion and move every two or so years. I suppose that is a job of sorts, but my house ... -
8/24/2008 11:36 AM
Los Angeles Real Estate Blog wrote:
There are numerous reasons to buy a home in 2008, and many reasons to not buy. An argument can be made for either decision; and only time will tell which was the correct choice. I believe your home is your home, not an investment. It's great when you make money on your home, but primarily it is your refuge. I know many who disagree, they buy, spruce up, sell and cash in on their $500,000 capital gains exclusion and move every two or so years. I suppose that is a job of sorts, but my house ... -
8/24/2008 11:32 AM
Los Angeles Real Estate Blog wrote:
There are numerous reasons to buy a home in 2008, and many reasons to not buy. An argument can be made for either decision; and only time will tell which was the correct choice. I believe your home is your home, not an investment. It's great when you make money on your home, but primarily it is your refuge. I know many who disagree, they buy, spruce up, sell and cash in on their $500,000 capital gains exclusion and move every two or so years. I suppose that is a job of sorts, but my house ...
This doesn't make any sense. If rates skyrocket and values plummet, a buyer is much better off waiting. He may be able to only afford the same house because of the rate/value balance, but if he buys now, he'll be "priced in forever" and not able to sell his home in the future because it will be underwater!
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It only makes sense to buy if the buyer wants to buy because he/she wants to own a home now - not next year. And there are a variety of reasons that people want to buy homes.
The other thought is that if rates go up 1%, prices drop 10%- monthly payment is about the same. WHAT IF interest rates go over 10%? - They went over 20% during the Carter years.
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