loading...

Point/Counterpoint: Is Now A Good Time to Buy Your First Home?

by Shilpi Paul

Point/Counterpoint: Is Now A Good Time to Buy Your First Home?: Figure 1

Is now a good time to enter the housing market, or should you wait? The Wall Street Journal recently tackled this perpetually-asked question by asking two experts with opposing views on the matter to weigh in.

Economist Eric Lascelles said “Yes.” Here are a few highlights from his argument:

  • Buying is cheaper than renting in 98 out of 100 major metros (according to Trulia).
  • Housing prices are down 34 percent from their 2006 peak.
  • Investors ramped up their home buying by 64 percent in 2011, so it must be a good time to buy.
  • We are seeing unprecedented low interest rates; even if home prices are still dropping, rates may be rising and you don’t want to miss out.

Financial Analyst A. Gary Shilling said “No.” Here are a few of his reasons:

  • Five million future foreclosures are still “waiting in the wings” and will soon enter the market, pulling prices down even more.
  • If those who are foreclosed on double up or move in with their parents, excess inventory will rise further.
  • In December 2008, rates and prices seemed low and experts recommended buying, but prices have since fallen by 9.2 percent.
  • According to Shilling, prices may still drop by about another 20 percent.

Experts can debate this topic all day long, but in the end an individual’s decision as to whether they will buy a home requires taking a number of variables into account (property taxes, down payment, interest rates) as well as their own financial situation, for the total cost of ownership. The decision for DC area residents is further complicated by the fact that the region continues to be both an expensive place to rent or buy a home.

Similar Posts:

See other articles related to: ownership, buying versus renting

This article originally published at https://dc.urbanturf.com/articles/blog/point_counterpoint_good_time_to_buy_your_first_home/5532

4 Comments

  1. Tom A. said at 7:27 pm on Monday May 14, 2012:
    Gary Shilling would say 'yes' if asked about the DC market. There are few, if any, future foreclosures "waiting in the wings" to be snapped up in DC. There are bidding wars happening again, and houses in the 400-600k range are under contract in a few days. It's definitely the time to buy in DC! Buy in 2012, or you'll be priced out by 2013, and be longing for another housing crash.
  1. Confused said at 9:04 pm on Monday May 14, 2012:
    Tom - Who are all these buyers for all these bidding wars? The recent hotness to the housing market, and extremely large price increases to match, doesn't seem to have a basis in the economic reality of the region and just doesn't seem sustainable -- in fact, it seems like another bubble in the making.
  1. mona said at 9:27 pm on Monday May 14, 2012:
    Confused...I agree with you, it does seem crazy but I see it happening all around my neighborhood and I don't live in Georgetown,logan circle, dupont circle or any of the other high end neighborhoods. I am in bloomingdale and most people don't even know where that is. Could it be a local bubble..sure but for right now houses are being snapped off the market in days. Right now I am watching a big victorian that was converted into to big condos. Wondering how long they will take to be snapped up
  1. Mary said at 1:59 pm on Tuesday May 15, 2012:
    I think the recent redfin analysis saying, more or less, that demand hasn't changed all that much in DC but that inventory is low is probably the accurate explanation of the buying frenzy we've seen lately in the city and inner suburbs. I don't know what that means for how sustained this will be, even in DC, though.

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!