Where is the market heading

giacona

LoanSafe Member
May 18, 2009
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I am looking to buy a property most likely a Condo or Town home in NJ. The issue I am facing is the prices seem to be very high. I am thinking of continuing to rent for now and keep saving more for a down-payment. I know the markets picture is hard to predict, but does anyone here see any cool off of prices any time soon?
 

bigfrog

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Aug 31, 2011
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Basic "Supply and Demand" rule applies across the board. It is a bit more tricky. Majority of people are like yourself, saved up and are expecting for Bubble Burst II to come soon, then buy. But it isn't linear. Any numbers of things can happen. It could be in their favor or not. Government, lenders, and customers are more clever and learnt from their lessons. They aren't going to let the it get them this time around.

With the good job market and high stock prices a burst wouldn't happen; at worst, a gradual declining in house prices as sellers/investors try to offload their inventories or recoup their investments. You can tell by those vacant houses on the listings. Smart people aren't going to buy high, and the dumbs aren't going to be qualified (as banks learned not to lend to those, if they do, they will eat it). People who are saving and waiting, will end up buying because it wouldn't be feasible to wait too long(Tax benefits, Savings, etc..), or as price slowly slide down towards renting equivalent. These are the people who will help keep the market from going down fast.

I am guessing the house market will have some impact on investors, as they will not make as much as they would have projected. And the longer they hold onto the properties the more they will lose. We can see that currently already happening.
 

bigfrog

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Aug 31, 2011
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And of course, inflation can also happen to keep the house prices intact. In this case, people who saved will lose; More like being punished for saving. Their money can buy less of everything. Where as, people who have fixed rate loans benefits, as salary and wage increases will make paying their loans more easy.

A sudden bubble burst wouldn't necessary happen.
 

Erik Sandstrom

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Jan 14, 2011
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Here's what I can tell you and it's really going to depend on where you are. I lend nationwide, so I tend to see certain areas start to trend differently at different times. I know the market where I live very well and can let you know what I believe is going on here. However in NJ, I have quite a few transactions that are going usually at all times. It seems to be a hot market still, and has been for a few years.

Here in California we are experiencing a couple things, supply & demand and affordability. Now that rates have seen an obvious increase affordability is getting more difficult. We're seeing remodeled homes sell fast still, and some of the slight fixer uppers stay on the market longer with a 20% increase in expired listings. Now this change happened I would say literally in a few months. The competition isn't as fierce in certain situations as it was which could drive a correction but not a big one.

Just like bigfrog mentioned above there isn't going to be a decline like we've seen in 08 for some time in my opinion as well.
 

giacona

LoanSafe Member
May 18, 2009
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Thank You

This is good information to think about. For now I am going to hold tight and keep saving. The condo/town-homes I want are out of my price range. I don't want to settle for less and sacrifice on features such as a garage which is a necessity for me. I will see where the market is when I have more funds saved