Rxmfn7

Hey guys. Ive been driving myself nuts trying to decide on what would be the best option for me financially right now, and could just use some other's opinions. I was planning on purchasing a house next year, but with the housing market as it is now, homes that I was originally looking at priced at ~120-140k are now priced at 80-100k. I wanted to wait until next year for a few reasons.
First, I had lost my job about 2 years ago, and was out of work for a few months. During that time I had pretty much drained my savings on living expenses, and was late on a few payments as well, and long story short I ended up screwing up my credit rating pretty badly.
Secondly, I currently still owe money on my S2k, and with some diligence I plan on having it paid off next year.
Ive been working on getting my credit built back up (low-mid 600s last time I checked, I know still bad ), I now have a job that Ive been at for about a year now, and bring home about $2400/month NET. I have no credit card debt, just school loan ($150/month), and car payment. Living with a friend rent-free.
Basically, Im scared that if I dont act now, that in a year or 2 when Im "ready" to buy, the market will be back up and Ill miss out on the low prices right now. Im seriously considering just selling my S2k right now and getting a cheap beater just so I can get into a nice house. Any insight or advice would be greatly appreciated.

aklucsarits

With your credit score where it is, and with lending standards so much tighter today, you will have a tough time getting a mortgage right now, much less one with good rates.

You are probably better off waiting, saving, and paying off your car before making any moves.

Andrew

[gTr]

Don't worry home prices are not going to improve for quite some time. Just look at the default rate. Its only increasing which means more and more houses are coming to the market. IMHO home prices have not reached a bottom yet and the market is not going to turn overnight. Don't rush in.

sahtt

New home sales will bottom in roughly one year. Used homes may have losses that extend in to 2011, average will be late 2010. This is based on data, not CNBC. Still worried?

00S2K01S4

I sold my place last year for a profit and holding on to it to buy another place. Been looking and waiting. I think I will jump back in Jan09. But I bet it will keep on dropping.

cthree

Now is not the time. Build up your cash, payoff debts and fix your credit. Your time will come. It's too early to buy real estate in the US right now.

philbert

can you elaborate a bit more on the data that supports your view?

Rxmfn7

How will a government bailout of the mortgage lenders effect the housing market in the near future?

sahtt

I could but I'm too lazy to find the graphs, save them, put in photobucket, etc.

An easier way would be for you to go to http://www.frontlinethoughts.com/gateway.asp and look around for the right topic. He explains it a lot better then I could plus I don't get any $$ or exposure by answering it in great depth here.

Note this is the average. You'll be amazed at how many people "sold for a profit" yet the housing market has adjusted to the downside almost 20% nationwide at this point. Not very many of the millions upon millions of people who have been foreclosed on chime in.

If you still can't find the information you are looking for, let me know. It has to do with the degree we have diverged from the mean combined with the trend of housing starts, how many homes make up the supply, the average amount of time they have been on the market, and all other sorts of data. It's 'relatively' simple really. This has to do with my projections on when this crisis will end, until the housing market stabilizes or there is some way to designate accurately when that will occur, the market will not turn with sincerity.

AssassinJN

Definitely hold off for now.

Your credit rating should be going up (use a credit card for purchases including gas and pay off the entire balance every month) and you should be building up for a 20% down payment (to avoid mortgage insurance).

The housing prices shouldn't increase much in a year but if you can get a better credit rating and the down payment you will have a much lower month payment and total amount spent after interest.