I’ve taken a
small survey of about 50% of my past clients
who bought homes between January 2001 and January 2009 to
find out if they knew
what they know now, would they have purchased again? I can tell you
this, the
answer didn’t surprise me, but would it surprise you?
63% of my past clients said if they knew then what they know now, they wouldn’t have bought a home when they did. They said they would have bought a home, just not when they did. The number one thing I heard was “We got caught up in the hype and I think we over bid on our home”
Most said that they would have had more patience, waited a little bit longer and built up a bigger down payment. Some said that if they had known of a tax rebate they would have waited the three years and got that, but that was only about 10% of the people.
So, what advice can I give to today’s buyers? Take your time, don’t rush yourself and don’t think if you don’t buy today you won’t be able to buy. There is a home for you and at the price you can afford, don’t be pressured in to a home you really don’t want just because you don’t see your home on the market today.
Right now interest rates are low, prices are almost half of what they were a few years ago in some areas and all indicators say that the interest rates and prices will eventually go up and possible as soon as early 2011. So, don’t lose out, but also don’t feel that if you don’t buy today. When prices and interest rates do start to rise, more than likely it will be slowly and not over night. Right now there is plenty of money to be leant and plenty of great homes out there.
If you are in the market for a new home, don’t hesitate to call me as your dream home could be waiting.
Todd Clark and the Friendly Home Team
Knipe Realty
Todd@IFoundYourNewHome.com
Phone: (503)524-9494
Fax: (503)746-9573
I am a licensed Realtor who specializes in Washington County, Oregon and also work in both Clackamas and Multnomah Counties including the cities of Aloha, Beaverton, Canby, Clackamas, Gladstone, Gresham, Happy Valley, Hillsboro, Milwaukie, Oregon City, Sherwood and Tigard. All information contained in these posts are copyrighted and cannot be used without prior written approval authorization from the author me Todd Clark. If you are looking for an outstanding agent please give me a call I would love to help you with all your real estate needs.
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Todd -
Great analysis. It would apply equally well here in Eugene.
Though we don't have a crystal ball... this does look like the time to purchase in many of the States.. Had the market gone up instead of tanked in the past three years, I bet your figures would be different...
I wish I had not bought the stocks I did when I bought them and the went down neither. Should have waited to buy them now when they are down.. But then, would I have? Will they go back up? Hopefully, eventually...
Thanks..
It is just a matter of people needing a place to live at a very inopportune time in a lot of cases.
Todd,
We often joke that we wouldn't have bought our house... even going in knowing it was a fixer-upper but in truth I'm glad we did. We bought in 2001 so we are still ahead of the game but buying an older home... with the maintenance it entails has me plotting visions of building next time out!
With prices and interest rates low, it is a very OPPORTUNE time to buy.
And if it's an OPPORTUNE time to buy, it can't be an inopportune time to sell.
It's your position (equity and interest rate) in your Next House that's important. It's what you can act to control.
You can't control the past - it's all ready gone.
Todd, you always have insightful articles. Thanks for these thoughts about whether to buy now or not. It's so much harder to get a loan now, so hopefully the people who are buying right now are actually the ones who can really afford to buy and pay the mortgage for the long term.
Is baseball season over yet? Are you going to Raincamp in Portland?
Blessings, Jill
Great article Todd ...
Todd, if you take that same poll in 3 or 4 years from the people that decide to wait for the market to go down further, you may have the exact opposite results, saying they had wished they bought a home now.
Todd,
Interesting results. Knowing the future would be great, but obviously hard to predict.
We are seeing a lot of this "wait and see" phenomenon in our current executive leasing market where folks are taking more time to decide what works for them before making a quick purchase decision.
All the best, Michelle
I think most folks want to time the market, especially when buying a home....just can't do it. You have to feel good about the price you pay no matter what is going on around you otherwise you will drive yourself crazy with analysis paralysis!
I think the poll is a genius idea. I'll try to use in in both my electronic and snail mail newsletter next time. I sold more homes in the 1990's than the 2000's and for the most part my clients are still in them. Thanks, Todd.
Todd - Nice job here. I think most of my past clients were very happy with the decisions they made, but I haven't polled them to find out...yet.
Your poll is a great idea, but I'd be afraid to hear some of the answers.
Todd - AMEN! I tell my clients the same thing, "BE PATIENT" and "STAY IN YOUR BUDGET". I'm seeing the same thing down here in Los Angeles and Ventura counties where my first time buyers are getting all caught up in the bidding war frenzies. I just try and be the voice of reason by reminding them that the lender will not lend anymore than the property will appraise at. Furthermore, I continually try and appeal to my clients Realtors to please stop showing them properties that are out of their price range.
While I understand that inventory is low and that you are just trying to appease them when they call you up to see some property that they saw on the internet. I realize that you may have already told them that property is not in their price range but when you show it to them anyway, they just end up coming back to me ordering me to make it happen. When I tell them I can't unless they reduce their dti or increase their down payment, then they're mad at me for being difficult.
Todd - I think it's so important for buyer's to take their time and feel comfortable with their purchase.
Everytime a buyer tells me they have to move by a certain date I ask where they will go if they don't and so many look at me confused, but I feel it's so important for buyer's to have a back up plan, so they don't feel pressured into buying a home they may not otherwise purchase. Sometimes extending a lease or moving twice is the best move.
Todd - LOL at Michelle's comment. OY VEY! I wish I had a dollar for every buyer who came to me and told me that their lease was expiring in such in such time (usually in 30-60 days). Talk about unrealistic expectations.
Whenever this happens, it's important that I (as well as their Realtors) educate these buyers as to the realities of our market here in LA & Ventura counties. We're in a sellers market here (and have been for many, many years) and for many buyers, it's going to take some time and a lot of houses and offers before they get into escrow. They need to be prepared, patient and realistic.
Todd you ALWAYS have great Posts! Thank you for the info
Todd,
How sad!
They say ignorance is bliss, but it seems to be the root of discontentment.
Bill
Todd, it is interesting how things change...i also would not have bought my home at the price i paid although i love it...i have first time home buyers who will not buy now until they have 20% down...i give them alot of credit for doing this!
Interesting Todd. Could be similar here, except now our inventory is about half of what it was, so the choices are becoming more limited.
This is interesting. Also interesting is that you posted it back in 2010 and things and feelings are still the same.
Hi Todd -
Excellent post and full of detailed information. I always encourage my buyers to wait till they find their dream home and don't over extend themselves just because they qualify for a larger amount on the loan. They still have to raise the kids, college, food, etc, etc, It's the best practice to always put ones clients needs and look forward for them even when they are caught up in the buying mode and arn't looking ahead.
Best regards from the Q
Todd, this is getting my Interesting Post of the Day award! First, I think it's cool that you polled your past buyers. What a great way to stay in touch!
Buyers always need to feel comfortable and not rushed....With it being the biggest investment, you got to...but, you also have to act when you find something you love or you will lose it...and, nothing stinks more than always thinking about the home that got away..
Hi Todd...I'm not sure what my Clients would say...the fact most of them have not moved for ten years tells me they are happy and probably made their home the way they like it. I'm sure most would like another opportunity to go shopping for the perfectly price home or location or have those extra features that cost them money to add on.
Great Post
great survey of question no one wants to ask, but should.
Hi Todd, Great post, very interesting survey. Sad that 63% in less than a decade are unhappy in their homes. We've been more fortunate here, having very few short sales and foreclosures. Clients that bought here in 2001 would do very well if they had to sell today. Post 2005 different results. 2001-2009 is less than a decade. My parents stayed in the same house for 40 years.
I think buyers need to think in terms of buying a home they can live in and enjoy for a long time rather than a short term investment in an asset class. A home is not like other asset classes.
No one can time the market and in my opinion no one should try to. All markets go in cycles. I think real estate markets are 10-15 year cycles. I honestly believe people should buy when they want to and can afford to based on their life conditions rather than market conditions. Plan on not having to sell for at least 10 years otherwise you may take a loss. If they're uncomfortable with a loss in less than a decade then I agree they should wait
BTW: I bought in 1989, it lost almost 50% of it's value by 1993. I didn't live in it or enjoy it 50% less. If I knew what I know now I would have bought another one in '93, the one next door at the fire sale. I'm kicking myself.
LOL! I don't know if any of my recent clients would buy another home any time soon! The environment here is ROUGH and I am talking about people who got the BARGAINS!
Hey, Todd! I included this post in Last Week's Favorites. Have a great Sunday!
I LOVE that you took that poll of previous customers... I know the bulk of my previous customers (in PHX market) would say they wish they had rented, waited, etc... I am now in Raleigh, NC beginning my career fresh and being markets are local I know the handful of people I have helped here are happy & settled!
Unfortunately, we don't have a crystal ball. But if you had surveyed them based on "are they happy in the home", I bet that would be a high statistic. Especially since they are still in them!
Very good information. Thank you for sharing.
Hi Todd, Interesting post and comment thread. I agree there is plenty of money waiting to be loaned but not sure I agree how "easy " it is to get an approval.
Todd I’m not real surprised but I think there are a lot of factors in play. I’m guessing the answer would almost always be in the 20-40% range no matter what the market. Those buying today at these low rates and low prices SHOULD be happier than normal for years to come.
Pat's favorite sent me over here. Interesting survey and the results aren't too surprising given market conditions. We all make the best decisions we can without the benefit of hindsight.
Todd, I also love the idea of taking a poll from your past clients. I would buy again if I had it to do all over again. I bought in 2004 and I would not have wanted to rent for 7 years. There has to be some value to being able to stay in your own place and customize it vs. renting and moving.
Sharon
Interesting way to keep in touch with your clients also. Sometimes our clients tell us many things that we hadn't thought of. Good post.