<p>Have housing prices dropped enough to make this a decent opportunity to buy now for investment, or not? What about specifically in the LA area?</p>
<p>If you think houses aren’t at their peak, which they’re not, then it might be a good time to buy if you’re willing to hang on to it for 3-5 years. I think San Diego and San Francisco prices have gone up about 10% in the last year (but it’s not typical of the whole country). I don’t know what’s been happening in the LA area for prices but you should be able to find that info fairly easily but you need to look at the specific locale since ‘LA area’ is too big and diverse of an area. Whether it’s a good investment you need to consider whether you’ll be living there vs renting it out and what you could get for rent if you did, whether the area is decent and generally on the upswing or not, how much money you’d need to tie up in it or not. </p>
<p>If I wanted to buy a home I’d be pretty comfortable buying one now. Just before the downturn a few years ago I was considering buying a condo for investment but decided against it because homes had been appreciating too much in the recent years and I was concerned about a downturn - good thing I didn’t buy it then. OTOH even if I’d have purchased it then, it likely would not be a money loser after hanging on to it for 5 years. Note that I’m not a RE investment expert (but then who is?).</p>
<p>I put our house on the market 2 months ago in NJ. The house was under contract in one month. We sold it for 5% below the asking price. We did price it well and fixed it up before we put on the market. In speaking with our realtor, he said the market is moving, many houses that were on the market for 6-12 months were beginning to get multiple bids.</p>
<p>Talked to a friend who runs a real estate office in my area. She said that the only homes that are really selling are those that are entry level homes for our area (the wording is mine), but you get the idea. The home that needs a lot of work, the smallest home or lot in the area is what is selling. This is in NJ.</p>
<p>Oldfort, congratulations!!!</p>
<p>Our house is not the biggest nor the smallest in our neighborhood. We have a lot of McMasions in our town, those are not selling. Our house had a brand new, top of the line kitchen. I noticed quite a few new homes went up around our street, and they were all sold within months.</p>
<p>We were very lucky. We bought our house 15 years ago, and we were very realistic when we put the house on the market. At the height of housing market, we used to regularly get offers for our house (note in our mailbox).</p>
<p>Oldfort, I am happy to hear that things are selling in your area. Good for you!</p>
<p>Latest I’ve heard, analysts are expecting home prices to continue to fall in some markets for at least a while. There’s still a lot of oversupply, and very weak demand (especially since the first-time buyer tax credit expired). But that varies by market; some are already beginning to bounce back a little. I think you need to look closely at price trends in the particular market you’re interested in. If it looks like it’s bottomed out and is heading upward, this might be a good time to buy. Also look at how much inventory is out there. If the local economy is beginning to pick up and there’s a low supply of available housing, you’ll want to move fast because prices will start to rise.</p>
<p>One indicator people use is the ratio of home prices to the annual rental on a similar house. As the attached chart indicates, this varies a great deal from market to market, with the SF Bay area, Honolulu, Seattle, and Orange County CA on the high end (houses most expensive relative to rents), and Pittsburgh, Detroit, Cleveland, Phoenix, Riverside-San Bernardino CA, and Las Vegas on the low end. This means it’s cheaper to rent than to own in places like the Bay Area; cheaper to own than to rent in Pittsburgh, Detroit, etc. But that doesn’t necessarily tell you which way housing prices are likely to go. The main reason housing is so cheap to purchase in places like Pittsburgh, Detroit, and Cleveland is that there’s very little demand, and that’s not likely to change any time soon. Phoenix, Las Vegas, and Riverside-San Bernardino are a little different; there, the problem is lots of people underwater on mortgages acquired at the peak of a white-hot bubble, tons of foreclosures (under state laws that allow homeowners to walk away from mortgages on their principal residence virtually penalty-free), and enormous amounts of housing now on the market at fire-sale prices. Demand will eventually rebound in those places, so now may be a good time to pick up some property cheap; just don’t expect a quick profit. Los Angeles is an interesting middle case. Home prices were very high there (relative to rents) before the crash; but they’ve come down a lot and are now quite low relative to rents. Unlike places like Detroit, Cleveland, and Pittsburgh, the fundamentals of the SoCal economy should remain relatively strong, so over the middle and longer term demand should be relatively strong, and home prices should rise especially as potential buyers realize it’s now cheaper to buy than to rent. So I would expect there should be some good values out there in properties that can bring in a good rental income in the short term and appreciate in value as the market moves toward rebalancing itself. (Note that the data I’m linking to are from a few months ago, but things probably haven’t changed that much in most markets). </p>
<p>[Rent</a> Ratios in U.S. Cities - Interactive Feature - NYTimes.com](<a href=“Rent Ratios in U.S. Cities - Interactive Feature - NYTimes.com”>Rent Ratios in U.S. Cities - Interactive Feature - NYTimes.com)</p>
<p><a href=“http://www.nytimes.com/2010/04/21/business/economy/21leonhardt.html?_r=1[/url]”>http://www.nytimes.com/2010/04/21/business/economy/21leonhardt.html?_r=1</a></p>
<p>House across the street from us has sold in 3 weeks for asking price. That price is down from 2-3 years ago but up from last year. They had a stager go through and get the house ready. It was showcase clean, little personality left in it and upgraded kitchen. Prices here seem to have stabilized, fewer foreclosures, house that are in good shape not long on the market.</p>
<p>One truth about Real Estate, they are not making any more! : )</p>
<p>Thanks for everyone’s thoughts!</p>
<p>The markets are very regional. In the northeast, the new home builders are seeing a lot of activity and sales. Not true in some other parts of the country. </p>
<p>Also, we’re seeing a pick up in resales in desirable parts of the region. Agree that the homes that are apparently selling are the ones that are turn-key. It’s tough on those of us that are actually looking for a knockdown … because the owners have all bought into the need for a new kitchen and baths and all repairs like roofs and septics and windows etc are all done. </p>
<p>I have a dream house in mind … I just need the right piece of land to build it on. And it’s OK if the land is occupied, if I won’t feel too guilty starting from scratch and I can afford it!</p>