Last week CNBC’s Jim Cramer said, “now is the absolute worst time to buy!” and he was talking about real estate. He said you will loose money.
Why do people buy a house? Unless they are buying investment property, they are buying a place to live. Yes, a house will make you money from future appreciation, but that is not the primary reason to buy a home. Can you loose money? Well yes, if you are forced to sell in a declining market that declined below what you paid for the house. But most people will just stay put until the next up cycle.
Here’s what Gary Keller, co-founder and chairman of Keller Williams Realty has to say about waiting out the current market (from This Week @ KW):
“First, residential real estate is not a national market product — it is a local one. To say from a national position that this is either a good time or a bad time to buy real estate is like saying the national forecast for the U.S. today is 92 degrees — it is a useless and irrelevant perspective. What is happening in your local market is all that matters.Second, trying to predict when it is a good time to buy, or not, means you’re trying to time the market. Staying on the sidelines is the surest way for most people to never time anything correctly.
Last, and maybe most important — there are always two markets in every market. There is the market of properties that are good buys and there is the market of properties that are not a good buys. Interestingly enough, this is true in either buyer or seller markets. To categorically say that this is the time to buy or not is absolutely ignoring the fact that every market really has two markets inside it.”
Cramer’s remarks might cause buyers to think they should wait to buy a house as Gary is saying. In our area, there are lots of good buys and a lot of houses that are still over priced. Buyers should find a great real estate agent and work with them to help them distinguish the deals from the duds and guide them through making offers and getting them accepted.