In his commentary this week, investor and author John Mauldin said that this might be the right time to buy a home. His target for a bottom in housing prices has been 2012 to 2013, which is why he thinks now is the right time to start looking around.
He also makes a key point about working with realtors and lenders who are connected and know the activity intimately in local areas. They’re the ones who know where the deals are. Below is key excerpt and link to full report.
…if you are in a place where you want to buy a home, now may be the right time to start thinking about it. The banks and government are simply overwhelmed with homes that have been repossessed, and it looks like there might be as many as 2 million more homes to come onto the market. Prices in many areas are going to continue to fall, and if you can get credit, mortgage rates are quite low.
If I were buying, I would want to meet agents or bankers who are in the “deal flow.”
The anecdotal stories of people getting homes for what seem like very good prices, in this depressed market, are all over the internet. There are homes that are certainly below replacement costs in some areas (and not just in the US but in certain parts of Europe as well).
While I think home prices should go somewhat lower, we are out of bubble territory.
There are starting to be values in the housing market for savvy shoppers. Which of course is what help creates a bottom. Which I have been writing for many years should happen in 2012-13.
So you can be patient, but if you want a home, put in a bid that will make you smile if you get it accepted. No rush. And there are certainly deals for people who can use a little leverage and buy rental property.
And I must admit, if there is another crisis in Europe and prices of vacation homes like the one I am staying in drop a lot? I might just jump in. I like owning stuff. But at the right price.