I live in the northern Virginia area and am interested in buying a house/condo for around 250k.

I was talking to a guy at the 2/5 table at mgm and he said he buys/sells fixer uppers for a living (probably in his 40's) and he was giving me some tips.

Last he said I should wait to buy a house if I can. He thinks home prices are going to crash this year.

Thoughts?

I wouldn't try to predict the future. If you plan to be in the house at least 5 years then go ahead.

Good luck with that.

I am currently in the process of buying a house.

If you are buying the house primarily/all with cash, I would wait. If you are going to take out a loan, I would buy now.

Interest rates increasing will make it harder for some buyers to be able to afford a loan for the houses they are interested in. This could bring prices down. However, there is the case that homeowners may be less inclined to sell if they already have an awesome interest rate. This could bring prices up since there are less houses on the market. It is hard to say what will happen. In my eyes, even if prices go down, interest rates will go up which will negate a good price anyway.

I'd rather get a place of my own now and risk a loss than wait and possibly be priced out of being able to buy a house, but that is just me. In my area, houses within my price range don't stay around very long. They usually get gobbled up by buyers. It will be interesting to see how much longer that happens.


I have a weird gut feeling that house prices might crash this year, but meh.

It's hard to predict when, but I would guess there is a crash coming. We sold our rentals for this reason. We're getting to the point where people are again buying more house than they can afford and getting mortgages with almost no money down. People still don't have savings to get through a recession. When the economy does start to slow down, it won't be long before people can't make their mortgage payments again and the foreclosures start happening.

I don't think the drop will be as bad as last time, only because there are institutional buyers with ready cash waiting to get properties at a bargain. Those guys weren't there in 2009 to buy all of the properties at a huge discount. I think they will temper the crash a bit.

If you plan to live there for a long, then you will probably be ok. If you think you will want to move any time in the next 7 years, I would not want to buy yet since I expect the price to drop.

I know in my area (NYC/Northern NJ) , we will probably have a 15-20% cut in RE prices i believe.. new tax code rules will be a part in bursting that bubble.

Why does it matter if prices drop 20% after you bought your dream house? Do banks force you to sell if your leverage is higher than X% ?

If so make sure you have enough cash, buy your dream house, ignore the noise.

This is my general view as well. Recently, I've been looking all over my metro area for houses and they are really expensive right now. I know in this area they can't go up much simply because people can't afford to pay more. I pay cash so it makes no sense for me to buy now. We're pretty late in the real estate cycle and I'm in no rush, so it's just a waiting game for me.

However, if you are getting a loan it's a whole different ball game. As interest rates go up (and they will go up over the next few years), your monthly payments will increase. There is no guarantee that prices will come down in the time frame you are looking to buy either.

BTW, it should be noted that home prices often fair quite well during recessions so I wouldn't count on that to drive prices down (although it could). I believe the primary force that will push prices down is rising interest rates, but that is of course a double edged sword if you are getting a loan.

In 2018, interest rates were moving up really quickly at a trajectory that looked to spell big trouble for the housing market. However, interest rates have calmed, and actually came down sharply in Q4 which stimulated a huge surge of mortgage applications in December and thus far in January. It will be interesting to see what affect that has on the markets.

Overall, it seems home buyer sentiment has turned negative in the past year. For many years it had been a sellers market (ie receive multiple offers over listing price very quickly) and it should be more of a buyer's market today.

Personally, I'd keep my eyes on mortgage rates but would probably wait until Spring when there will be a lot more inventory on the market. If you are buying cash, I'd probably just rent instead.