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Do you think home prices are going to continue to fall?
I was just reading about a big decrease in the price of homes. I'm wondering where it's heading ...
A friend of mine just sent me this link to a video of a news show in 2006 where a bunch of different commentators were talking about housing prices. Link One of the commentators insisted that the market was going to take a turn for the worst and the rest of them basically laughed him off the stage.
I guess my point is that speculating on home prices may be a lucrative business, but it can also be quite dangerous.
Prices have been falling in most of the country for at least a year. Most experts, I think, are predicting that - at best - prices in 2008 will continue to fall, at least a little, though it really depends on the market - prices in most of Florida and Southern California still look like they have a ways to go (down), while prices in San Francisco and the immediate area haven't fallen at all.
So if you're thinking of buying real estate as an investment, now may not be a good year - or it might be, depending on whether you can find a good bargain, and are planning to hold onto the property for (say) at least five years. If you're thinking of buying a home, you're almost certainly better off renting if you expect to move again in three or less years (because even if you sell at the same price, you have to pay sales commissions and other costs that probably are 7 to 9 percent of the price of the house).
And if you are considering buying and settling in for a number of years, then you probably should do so, assuming you qualify for a reasonably priced mortgage. Interest rates are relatively low (for fixed rate mortgages, which is what you want), there are real bargains out there, and you have a lot more choices when buying than when renting, for most types of homes. And, of course, you can remodel or otherwise improve your home to make it closer to your ideal place to live, something that makes no sense for a rental.