Most say 'good time to buy,' few say 'good time to sell'
Most Americans surveyed by the group that provides the data for a widely tracked measure of consumer confidence say it's a good time to buy a home -- but not a good time to sell one.
This will probably not come as a shock.
Interestingly, though, renters are less bullish about buying than homeowners, who generally would have to sell in order to purchase.
That's according to a study for the Mortgage Bankers Association and its Research Institute for Housing America. The report looked at years of results from the University of Michigan's Survey of Consumer Attitudes.
Fewer than 65 percent of renters thought it was a good time to buy as of the beginning of this year, compared with about 80 percent of homeowners.
"For homeowners, sentiment in 2011 is at a level similar to the average over the last twenty years," notes author Gary V. Engelhardt of Syracuse University. "For renters, sentiment is somewhat lower now than the past average."
Sentiment about selling is -- naturally -- far more negative than average.
Fewer than 10 percent of homeowners surveyed at the beginning of the year thought it was a good time to sell. That measure was rarely below 40 percent from 1993 through 2006, and surpassed 70 percent at the end of the housing bubble.
Some of those who do think it's a good time to sell seem to mean it in the relative sense: They think prices will continue to fall, so later would be worse.
On the flip side, most of those who say it's a good time to buy offered a variation on "prices are low" or "prices are going to rise." Fewer cited low mortgage rates as their main reason for holding that view.
Oh, and one more nugget: Americans (owners and renters) are almost always more likely to believe it's a good time to buy than for homeowners to think it's a good time to sell. Check out the graph on page 33 of the report (the one labeled Figure 14) to see the years-long trend.
Do you agree it's a good time to buy and a bad time to sell? Some here have made the argument that it's a bad time to buy and a good time to sell (in the "sell now or lose even more value" sense). I've also heard readers opine that it's a bad time for both. I don't think I've heard anyone say it's been a good time to buy and sell in the last few years, except the occasional real estate agent.
But sometimes it's simply the time to move, whether good or bad. Though the level is low, homes still do sell every month.
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Comments
It's not surprising that the average person gets this wrong. No, it is not a "good time to buy" if you're currently renting or living with family. Why? Because prices should still drop a bit as more shadow ineventory hits the market. It's supply and demand and most of the "supply" is not on the market. And even the houses that *are* on the market are taking a long time to sell because of the job market and seller stubbornness.
On the other hand, if you need to sell anytime in the next 5 years or so, now is as good of a time as any. If your prices go up, the price of your next house goes up as well. Same thing if prices go down. All else being equal, you're better off selling what you need to take a new job or otherwise relocated. Live your life, don't hold on while expecting prices to rise, because simple supply/demand make price increases unlikely. Then you have the issue that young people (entry level buyers) are largely indifferent on the issue of buying a house--especially one that is in questionable condition (not updated).
Posted by: chappy10 | December 21, 2011 8:54 AM
anyone wishing to buy, do not use a maryland CDA loan. There are many who purchased a home before the crash, using CDA morgage loans. Now many are stuck unable to sell, unable to rent because they can't refi (can't rent with cda and a few others types of loans as well) If you have a CDA loan and your home drops in value, about the only option to move is to go bankrupt. if you can't bankrupt, you could screw yourself and your overall future finances. Search the net, many horror stories about cda loans.
Posted by: allen | December 21, 2011 10:27 AM
timing th market for price is not a good idea. better to think about it on a cash flow basis - if you're paying $1200 a month for rent, and you can buy a place for under 150,000, with a 20% downpayment, you'll end up saving a significant amount of money over 3-5 years. that is including taxes, utilities, insurance, and the opportunity cost of putting all your capital into your downpayment. even if prices drop another 10% you could still do well. check out rent v. buy calculators on nytimes.com and finance.yahoo.com
Posted by: Phil | December 21, 2011 10:45 AM
Not trying to nitpick but what does "fewer than 65%" mean? This could be 1% or 64%.
Posted by: GD | December 21, 2011 11:44 AM
GD, the report has graphs rather than all the underlying numbers, so I could only eye it up -- thus the approximation. It's definitely under 65 percent but probably above 60 percent.
Posted by: Jamie Smith Hopkins | December 21, 2011 2:00 PM
RE: Allen's post above
Want more proof that socialism doesnt work? Allen is recieving a subsidy (read tax payer funded for those that pay taxes) to obtain a loan at a rate that he otherwise would not be able to obtain in a free market. So this individual who obviously has google skills and would likely know that their was a requirment to stay in the home to recieve this gift is now telling us the horror of his plight.
Every social progam should appear as a line item tax on every americans paycheck so they can see where their money is going so we can end this non-sense. Hunger is a very powerful motivator. Remove the support and people will find ways to make their situation better. Necessity is the mother of invention. Only after we do this will the market will find balance.
Vote Ron Paul and watch what a goverment that is a fraction of its current size can do with all this tax revenue.
Posted by: elweedz | December 21, 2011 9:31 PM
depends on individual circumstances... prices and interest rates are low so in general it is a good time to buy...and sell to if you plan to buy a lower price property...
Posted by: Flavio | December 25, 2011 1:59 PM