Should I wait to buy?

I got that question today from a buyer's mother. It was a first time home buyer and they are a little nervous about buying.

There is no definite answer to buy or wait. I'm not a psychic and I honestly don't think anybody can predict our economy at this point. The metro Detroit economy is not good but will the metro Detroit real estate go up or down?

My answer is that all home buyers at this point should buy for the long term. You need to buy with the intention of staying in the home for at least 10 years. I think we are in for a period of 5 - 7 years of uncertainty. I think we are going to have periods of flatness and periods of real estate growth. I don't think we are going to see huge metro Detroit real estate price increases.

So let's be the devil's advocate and say real estate prices drop next year. Does it really matter if you aren't going to sell for 10 years? What happens if you wait to buy next year? If homes are cheaper but interest rates are more expensive will you save money?

So a $200,000 home at 5.5% has a payment of $1,135. if you wait and the home is $180,000, but interest rates are 6.5% the payment is $1137. I can't predict what the future will be. Sure the home may be cheaper and interest rates may be the same but who knows. I don't and I don't think anybody can.

But the bottom line is if you wait for the ultimate bottom you are going to miss it. Who is going to tell you it is the bottom, before Metro Detroit home prices go up? Will there be some magical flag or sign from heaven that will tell you? Unfortunately no.

If you buy now you will have been in the house, already making changes and memories. You will be getting tax deductions. You will have one year and maybe more of your mortgage paid off. Yes by waiting you have a 50/50 chance of getting a better deal or paying more. It's like rolling the dice. Or YOU COULD BE LIVING IN YOUR OWN HOME. BUY FOR THE LONG TERM.

Search Michigan homes for sale and get the latest foreclosures emailed to you.