Comments on: Is Now A Good Time To Buy A House?

By: Getting Rid of Debt » Archive » The Friday gathering - Only 13 more days

Wed, 22 Oct 2008 04:22:52 +0000

[...] Is Now A Good Time To Buy A House? – Uh, I sure hope so… [...]

By: Congratulations to the Starbucks Gift Card Winners This Sunday | No More Bad Debt

Tue, 21 Oct 2008 04:40:28 +0000

[...] Always a great question, Four Pillars asks whether now is a good time to buy a house! [...]

By: witchypoo.com » Blog Archive » update October 2008

witchypoo.com » Blog Archive » update October 2008 — Tue, 21 Oct 2008 04:06:46 +0000

[...] just as I’m trying to get moved in before the baby comes. And, truth be told, I’m questioning whether buying now is really a good idea or not (?) Considering the fact that I’m working in the one industry that seems to be holding it’s own [...]

By: Four Pillars

Four Pillars — Thu, 16 Oct 2008 17:15:59 +0000

Ashley – nobody (not even us) know where real estate prices will go. All I’m saying is that there is a definite possibility that you could lose money on the house.

By: Ashley

Ashley — Thu, 16 Oct 2008 13:58:45 +0000

So even if I buy a home now and stay there for 5 years the value of the home wil be lower than what I bought it for?

Thank you all for your help:)

By: Four Pillars

Four Pillars — Tue, 14 Oct 2008 23:43:47 +0000

I agree with Nobleea about the interest rates and house prices as well.

To be honest I would not buy a house right now because the risk that it could go down significantly is fairly high. I may do a post on this but I think the fact that the housing prices in Toronto have started to go down for the first time in 10-15 years? is pretty significant. With all the gains in real estate over the last 10+ years, a 30% drop is not unreasonable.

By: Mr. Cheap

Mr. Cheap — Tue, 14 Oct 2008 21:48:39 +0000

Nobleea: That’s my understanding too.

By: Jordan Clark

Jordan Clark — Tue, 14 Oct 2008 21:36:32 +0000

Oh and I forgot to add, have a real down payment saved of at least 20% and try not to go over a 25 year amortization.

By: nobleea

nobleea — Tue, 14 Oct 2008 21:06:11 +0000

I think there is a cause and effect relationship between interest rates and house prices. But you have it mixed up. All else being equal, as interest rates go up, home prices will go down. This comes down to affordability. Increasing interest rates will increase the monthly payment that a new buyer will pay. Unless there is decent wage inflation to match the interest rate increase, then the house selling price will have to drop to keep affordability the same.

That is assuming a rational, well priced housing market of course.

By: Jordan Clark

Jordan Clark — Tue, 14 Oct 2008 20:52:46 +0000

I don’t think there is a direct cause and effect that when housing prices go down interest rates have to go up, it could happen. But no one can predict where interest rates will go. If the country continues down the road to recession the BoC can try and use interest rate cuts to bring it back.

I don’t know the Durham region, but if the area is seeing price reductions because prices are hitting an affordability limit of people’s income (like Vancouver) then an interest rate hike will just increase downward pressure on prices.

I’ve heard you should plan to buy only if you will live there for 5 or more years. I would do a rent vs. buy comparison and see which puts you further ahead.

If you really value owning instead of renting, you are comfortable with the current prices & interest rates then go a head and buy.

Just don’t over extend yourself and don’t buy out of fear.