5 reasons not to buy a home in 2009

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1. Prices are still dropping
Data shows that prices are still dropping in many markets. If you buy today, your home could be worth less in a year or even two.

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2. This sale will be on for a while
From a pure investment standpoint, you'd probably be better off investing in stocks, said Nancy Flint-Budde, a Salem, N.Y.-based certified financial planner. In a normal market, real estate appreciates about 5% a year, she said. But even if prices stop falling this year, as Moody's Economy.com is predicting, price appreciation could be weak for a while.
In fact, while some recoveries resemble a "V"-shaped pattern, this housing recovery could look like an "L" -- once a bottom hits, prices will flat line, said Jay Papasan, one of the authors of the book "Your First Home." Prices likely won't rocket to housing-boom levels soon, as conditions are exacerbated by rising unemployment and foreclosure inventory.
The lesson: This housing sale could go on for a while, so there is no need to rush.

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3. You may not stay put
If prices continue to drop, you might have to be in that home for longer than you thought in order for the investment to make financial sense.

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4. Your job could be the next to go
Maybe you're spooked by the headlines of job cuts. Perhaps you have friends who have recently been laid off. If you think your own job might is in danger, stop right there -- and stay put.

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5. Your cash reserves will be eaten up
Given the recession and the fragile economy today, even if you feel confident about your job it's wise to have a cushion to land on in the event you get hit with a financial broadside, a divorce or a major health bill, for instance. If your down payment would deplete your rainy day fund, keep saving for a while before house hunting.

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