Conclusion: Now is a good time to wait.

RE: Raj @ 6 – It seems like the median conventional wisdom on this site sums to something like this:

* A $1,000,000 house in Seattle will be worth about $850,000 in 1-2 years
* It will be back at the original $1,000,000 value in 5-7 years
* After that, let’s assume normal appreciation

I wouldn’t use that price range. Those houses already have gone down much more than lower priced houses, and are much different than what we’re typically talking about here. I was actually thinking of doing a piece over at SREP about the upper end market and how different it is.

* A $1,000,000 house in Seattle will be worth about $850,000 in 1-2 years
* It will be back at the original $1,000,000 value in 5-7 years
* After that, let’s assume normal appreciation

Scale the numbers as needed for your price range, take a guess how long you want to live there, and decide if this means it’s a good time for you to buy.

On the extreme end, you could believe in a Snigletian 80% collapse in home values, in which case it is unequivocally a horrible time to buy. But that viewpoint is held by a small number of people on this site, and I’m with the moderates.

RE: Scotsman @ 8 –
I am in Orlando this week.While I agree that condos are available for $20000, the location is far from great.Near the hotel I see condos for $400k,empty!

I was thinking the same thing, $300k would but a mansion in San Antonio in 2003 but you’d have to live in SA.

Thanks for ur suggestions

Thanks Tim, for shortening my blog….you do excellent work :-)

RE: Kary L. Krismer @ 2 – Well as I mentioned in the post, it only applies to owner-occupied, and only to homes with mortgages minted 2003-2007 inclusive. I thought I read somewhere that the median purchase date of homes being foreclosed on was somewhere around 2003, which if true would mean that around half the homes being foreclosed on were outside that window anyway..

Sorry, I missed that. That’s similar to CA, and I’ve read that down there for some reason the lenders aren’t really discriminating, and applying it to more.

The thing is though, the tenant right provisions (extended time after the sale) don’t apply to only such loans (I’m pretty sure), and I’m seeing a lot of new notices that only reference the 20 day period.

By The Tim @ 1:

Regarding the “lull in apparent foreclosure activity” I mentioned in the post: it would appear that it is already here. The 1st through the 12th this month there have been only 116 notices of trustee sale in King County. This compares to 399 in the first 12 days of last month.

not to be picky, but….

Actual foreclosures, Trustee Deeds, are higher than ever and more than twice last year’s pace. So the lull you speak of is just in the start of the foreclosure process, not actual foreclosures.

And because of the runup in NOTS docs filed in May-July, you’d expect the actual sales to increase over the next 90 days or so.

Sorry, it was a knee-jerk reaction.. ;-) Thankfully, your answer preceeded mine, and was very good.

The condo situation in Florida is pretty grim though. Folks won’t buy because they fear getting stuck
with HOA assessments, etc. on all the poorly built crap. In many cases the payment is well under the
HO dues. Kind of like the Midwest where taxes are so high on some properties the monthly tax bill
exceeds the mortgage payment.

U.S. FORECLOSURE ACTIVITY INCREASES 7 PERCENT IN JULY
[Full copy of RealtyTrac's article snipped. I linked to this in the post, there's no need to paste the entire thing in the comments. -Tim]

Check the data out at: http://www.realtytrac.com/ContentManagement/PressRelease.aspx?channelid=9&ItemID=7192

Hey Scotsman,
What happened to that vow of yours to be less sarcastic? Or were you just being sarcastic when you said it ? :)

Regarding the “lull in apparent foreclosure activity” I mentioned in the post: it would appear that it is already here. The 1st through the 12th this month there have been only 116 notices of trustee sale in King County. This compares to 399 in the first 12 days of last month.

not to be picky, but….

Actual foreclosures, Trustee Deeds, are higher than ever and more than twice last year’s pace. So the lull you speak of is just in the start of the foreclosure process, not actual foreclosures.

Speaking of Florida:

These Florida RE investors from Mexico are in for a rude surprise?

They’ll lose millions to gain citizenship as RE chronically continues its collapses IMO, as sanctuary states like Florida ramp up overpopulation, condense living space, reduce per capita expenses; thus drastically lowering wages and causing even worse than Great Depression level unemployment and poverty….the Malthus Theory is true. American economists hate Malthus because their assumption that technology will deal with population growth can’t stop slam dunk unemployment, poverty, reduced wages and more collapses in RE prices. The only solution, economists will never admit to, on propping up RE prices, is immediate depopulation in America…LOL

These foreign RE investors are clearly going lose their shirts in states like Florida [California too], if we don’t depopulate. But I imagine they’re too dense to figure it out.

The news URL referenced:

http://blogs.usatoday.com/ondeadline/2009/08/foreigners-buying-property-to-get-us-residency-.html

This is a great time to buy- rates are low and it’s a buyer’s market! Kramer is calling the bottom… again. Even the WSJ is reporting “the recession is over.” Happy days are here again! Buy now, or be priced out forever!

Did you know you can buy a 2/2 condo in Florida for $25-30K? This has to be the bottom.

Save a Realtor- buy a house!

Is this the right time to buy?

Two years ago was a horrible time to buy. Two years from now might be a better time to buy than it is now. Seems likely to me that prices will continue to drop for the next little while, but there are more “gems” out there, bargains that are seemingly priced well below comparables.

So the answer is ” It depends.”
If you’re planning on selling quickly, nope, not the right time to buy, unless you’re buying insanely cheaply, selling for less than market value, and know what you’re doing.
If the mortgage will be way over what a comparable home rents for, then probably not the right time to buy.

If the monthly payments are at the maximum limit of what you can afford, then nope, not the right time to buy.

But if you can easily afford the monthly payments, you plan on staying in the house for a long time, it’s fairly close to what a comparable home would rent for, it’s selling for way less than comparable homes, and you really like the home, then sure!

You’ll never hear me utter the phrase ” It’s a great time to buy” because the phrase just reeks of sleazy agent and I fancy myself the anti agent, and it’s been such an overused phrase, like ” World Class”, but there clearly are more ideal times to buy than others. Right now is not the most ideal time to buy.

A trustee, beneficiary, or authorized agent may not issue a notice of default under RCW 61.24.030(8) until thirty days after initial contact with the borrower is made as required under (b) of this subsection or thirty days after satisfying the due diligence requirements as described in subsection (5) of this section.

Since it specifically refers to the notice of default, I took that to mean that once the notice of default has already been sent out, the lender is outside the window of these new requirements.

Of course, if the 2002 buyer went out and cash-out-refi’d three times during the bubble their mortgage is in the window even though their purchase wasn’t, and I think that kind of nonsense is behind many/most of the foreclosures we’re seeing today…

I don’t believe that’s correct. I think the law most likely applies to any Notice of Trustee’s sale dated after July 26, 2009. Unfortunately the law doesn’t have transition provisions in it, so it’s not clear.