Procrastinate: to defer action; to delay: to procrastinate until an opportunity is lost.
Procrastinator or smart buyer? Smart buyers don’t procrastinate. They wait for the market to hit bottom. They wait for prices to get as low as they are going to go. Then they buy their house and ride the tide of increasing value as years roll by.
Is there anything wrong with that plan? Well, there is the obvious fact that you will not, cannot know when prices have hit bottom. No one rings a bell at the bottom of the market. Home prices may have already hit bottom. Hindsight will tell us. By that time, it will be too late. Then again, maybe prices will go down even more from the surprisingly low levels of today. Do you feel lucky?
But is price the only factor you must take into account when buying a house?
Interest rates have risen lately. The increase in the cost of financing can negate a price reduction. So now, you can gamble that prices continue to go down and you can gamble that interest rates go back to the lowest levels in many years…and stay there until you are ready to buy. How lucky do you feel?
You can also gamble that the attractive income tax credits that are currently available will still be there when you are ready to buy. What tax credits? Federal tax credit of up to $8,000. California tax credit of up to $10,000. Applications for more than the $100,000,000 that was allocated have already been received for the State credit, so good luck with that one. Even if they are not all approved, do you think you have a chance at getting a slice of that pie? If you procrastinated on making the purchase of a brand new home from a builder because you expected the prices for newly built homes to go even lower…well, you may have lost that gamble. Keep waiting and Nov. 30th will pass and you will miss the chance for the federal credit.
Procrastination…gamble…there are those words again.
If you are planning to buy in Dublin, Fremont, San Ramon, Newark, Pleasanton, Livermore, Newark, Union City or most places in the Bay Area, don’t procrastinate. Real estate values may have bottomed out.
