My question is along the lines of the last poster who commented about the market is CA. The big question is: how will the credit crunch affect house prices? It looks like a buyer’s market is emerging and prices are going down. More credit restrictions will make for less buyers, and sellers will have to be competitive. I’m inclined to buy a second home and turn my current house into an income property. But before I liquefy some assets (spare car, timeshare, boat), I want to make sure I am stepping into a buyer’s market. Is now the right time to buy a home? I know there may not be an easy answer...

Well, two issues come to mind:

1. The property market hasn't fallen yet. In fact, the global property market is still waiting for a "correction"

2. It's extremely important to look at the local market - take generic figures for country and state/county with a pinch of salt, because local conditions can vary from town to town. So if you do look at a specific area, drill down to the details of local market conditions.

Hope that helps, and welcome to The Finance Forums.

Well, it all depends on the area were you at as there are big differences in the housing market.

I would wait because home-prices have not corrected as of yet. Sellers are not willing to lower prices (according to existing homes slaes figures released yesterday by the NAR).

Sellers will soon be forced to lower prices as supply is at an all-time record of 10.0 months which is of great concern and the housing market correction is very likley to last longer then anticipated which is one reason why I wouldn't recommend to buy at the moment and wait until you see the contraction of home prices.

Home prices will have to contract in order to work off the high inventory levels.

It may be different in your specific area and I would gather as much data as possible before deciding on how to act.

As far as the correction is concerned I believe we have a long way to go.

__________________
It is not smart to play it safe but it is safe to play it smart.

Sounds like it's not the time to buy yet, something I'll bear in mind for myself as well. However, while waiting for the market correction you can try to liquefy those assets, as you suggested. The timeshare might actually cost you money to offload. The resale market there has gotten really, really bad, I know first hand; there are now companies like Timeshare Relief that you pay to get you out of a contract when no profit is possible. So what you might think of as an asset may not be. Then again I don't know the type of property you have, or the location, I just saw that term and a red flag went up...

Most people would be better of to liquify their time-share properties.

__________________
It is not smart to play it safe but it is safe to play it smart.

That is the thing the media and others lump all the housing markets into one category when the market varies across the nation. It depends on a lot of factors including job availability and others.

__________________
Small Business Cash Advance / Wall Street Journal Online

I think it depends on the area. But from what I have researched, maybe it is best to wait for at least a year. But I am no expert!

__________________
Non ChexSystems Banks | Fast Credit Repair Tips

Yes it depends on location but the problems in the housing market is likely to last until the second-quarter of next year.

It a tough call right now but personally I would stay away from it in most cases.

There are good deals out there right now but you need to be an expert in real esate if you try to enter the market right now.

__________________
It is not smart to play it safe but it is safe to play it smart.

First, a hello here to everyone because this is my first post.

I keep hearing references to "credit crunch"? I understand that there is a "credit crunch" to a particular segment of the market......the sub prime borrowers, but typically wouldn't a credit crunch be more clearly defined as banks restricting lending to borrowers that would normally receive credit?

So outside of the sub prime mortgage market there has actually been a credit surge over the past months. Commercial, Industrial, and Real Estate Loans.

The sub prime restrictions should have been in place before they ever were un-restricted imo. Thank your favorite greedy CDO buying institutions for that mess, and go ahead and thank those really honest and independent ratings agencies while your at it.

I agree that the pool of buyers has fallen because those "champagne drinking with beer budget" buyers are no longer going to be able to be in the picture. Whether real estate is attractive now or not is a question that definitely needs to broken down into regions. I think you'd be hard pressed to find a true "sellers market" anywhere right now but there are plenty of "buyers markets" available. The thing is though, that some of those buyers markets may become even better buyers markets in the days ahead.

Personally, I am looking more and more at the foreclosure auctions but there are plenty of vultures there and screaming deals are not as easy to come by as what some might lead you to believe. Living in Seattle we've done quite well with homes staying on the market longer but we have not really seen any depreciation in home values (unless you are a desperate seller) <-- of which could net you a good deal if you find one desperate enough.

Real Estate is a regional game.....I do not think that now is a great time to be a big time speculator (residentially) unless you have plenty of capital.....commercial market is a bit of a different story, again, depending on where you are at.

Good Luck.

I agree. You have to be patient, and it really does depend on your region.

In my market, prices have yet to drop, mainly due to stubborness. But there are some areas where new build homes are selling for 20% below their pricing when the homes were originally built.

On the loan side, rates are still competitively low. Anyone remember the 18% rates in the 80's?