Should you wait for the market bottom?The housing market will continue its downward spiral, forecasts say, and that means opportunities for buyers. But waiting for the market bottom may not be the smartest strategy. Here are 5 reasons to buy now -- and 5 reasons you may want to wait.
By Melinda Fulmer, MSN Real Estate
The best markets in 2007's third quarterThe worst markets of 2007's third quarterForeclosures up 75% in 2007The latest housing headlines are far from encouraging: Foreclosures are up, home prices are down and new-home sales are at record lows. All this dismal news has many buyers sitting on the sidelines, afraid to make a move. But, economists say, waiting for the bottom may not be the smartest strategy.Calling the market low is a difficult task, and it's most often spotted in the rear-view mirror. For one thing, there's no agreement on when the U.S. real-estate market will officially touch bottom. If you believe the National Association of Realtors, it will happen later this year. Investment bank Merrill Lynch is much more pessimistic, predicting that U.S. home prices will drop another 15% this year and 10% in 2009, with perhaps even more depreciation in 2010.
But for many buyers, there's no real need to wait for the market as a whole to officially bottom out, says Delores Conway, director of the Casden Forecast at the University of Southern California's Lusk Center for Real Estate. "Real estate is local," Conway says, and therefore what constitutes the bottom for the country is meaningless for those looking to buy and sell homes in their own neighborhoods. Prices in many markets have not yet hit their lowest point, but they aren't that far off. And in other areas, only the pace of sales has been affected; prices have held firm or gone up. Waiting for the absolute bottom to hit before buying puts you at risk of missing it and getting caught up in a market on the upswing. Plus, for some first-time home buyers, owning simply makes better economic sense than renting.Downturn, what downturn?Of course, in some parts of the country, there's no real reason to get cold feet about buying. Prices have ticked up slowly and are expected to continue that slow march for the foreseeable future. "We have not seen a downturn in our market," says Marianne Ackerman, of The Property Shop in Glenwood Springs, Colo.