07-25-2011 12:53 PM
One point in Mr. Builder's post that bears emphasizing: places like Fall River, or Lynn where I live, were hit harder than many areas in MA because those are the areas where, during the run up in prices, many people who shouldn't have bought purchased homes using 100% financing, 1-year adjustables, 'stated income' mortgages (now known as 'liar loans'), etc. When prices fell just a little, these people were in immediate trouble as they had no equity and were facing payment adjustments with no ability to re-finance. This was a big contributor to the market devaluing (not a cause of it per se, but a contributor to the snowball effect.)
Because of all that, these areas have proportionally more bank owned and short sale properties, which skew the market downwards and make it harder for these places to come back. As I said in an earlier post, some communities in MA have regained all that they lost in home values.
Having said all that, it doesn't sound to me like you have the right mindset to buy a home right now. For most people it's the biggest financial decision of their life, and if you were my client, and we had a conversation that followed the lines of this thread, I would tell you I don't think you should be looking at homes until you come to terms with your doubts.
You like facts so here are a 3 and 2 opinions: 1. interest rates are very low. 2. Prices are very low. 3. If prices take another big tumble, we are all up the creek.
In that situation I would personally rather own a piece of land I can defend rather than be thrown out of a rental property owned by someone else. If you are going to be wherever you buy for 5-10 years, you will probably (yes, probably) be OK.
07-25-2011 09:25 PM
I guess Im not following how any of this is negative from a buyers point of view?
My wife and I bought a year ago and got a home that 5 years ago would of cost me 100,000 more easily.
Not to mention rates are record low.
Seems in Boston that others agree, since we have had huge last couple years for people buying.
Timing is never 100 percent perfect, but I have no regrets on my own home purchase.
07-27-2011 02:08 PM
You know old saying “What goes UP, Must come DOWN” well we are in the reverse cause sooner or later the market will turn. You are showing the fact of a market past, everything changes and returns are always different. Real Estate is a long term growth market. Simple facts that are shown are that the markets turn and those that wait usually pay higher interest and prices. By the time you feel good and go to purchase the bottom of the market would have come and gone. Higher prices and higher demands bring interest rates up.
You state that purchasing now means throwing away equity which in part is very true, if you are living with your parents that aren’t charging you a penny to live in their house. So I am going to assume that you are be on this stage in your life.
The fact is the longer you pay for housing as in rentals; you are building someone else’s equity and not yours,Flushingyour equity down the toilet. When you look at it, you never ever loose equity as long as you are living in the home; you only loose it when you sell. So if you never sell you never loose. The fact is every dollar spent in rent today is equal to almost double, possibly more in fifteen years of potential equity you could have had if you purchased. History shows us that.
History shows us that markets turn, they go up and they go down, But over all they climb up. There is no factories building more land, matter of fact, this last year there has been more land claimed by the Seas then there has been created. A Decreasing commodity usually means increase in future prices, global warming also plays a roll with higher oceans.
The fact is you are afraid of loosing; there isn’t a person who isn’t. But I would really like you to know the simple fact that you refuse to enter in to a market because of that fear and chances are you would rather flush money away to someone who isn’t afraid. Paying rent and not having something to call yours, donating your hard earned dollars towards the growth of another person’s equity. I have to commend you, your self-gratitude for it must be higher then the landlords bank account.
Happy House Hunting
07-27-2011 08:46 PM
"What goes up must come down"...because of gravity not history.
I think people are on the fence because of the numbers:
Take this scenario of a couple buying their first house that costs $315000 with $30,000 down and 4.75 interest:
Monthly Home Ownership Expenses
-Total- $1955...and we haven't even listed out buying appliances, repairs, unexpected costs, insurance, trash removal, security, lawn care, closing costs...all items specific to owning. Also, maybe you bought a condo and have a $300 condo fee on top of all of that!
Let's just say utilities between owning and renting are a wash.
Monthly Renting Expenses:
Now I'm not a rocket scientist but that's $455 ahead of the game each month by renting. That's $5460 each year.
Maybe people are on the sidelines because they are scared....Or, maybe they see the group of foreclosures coming down the pipeline and the current predictions that the market will be soft for a long time.
Renting for the next two years is a much safer bet and the money saved by renting can do a number of things: pay off debt, save for retirement, increase emergency fund, increase down payment on future home. So yes - you might be paying someone elses mortgage by renting, but it's $455 dollars a month cheaper than taking one out for yourself...with less risks and headaches.
I'm not saying that people should rent forever, but it makes a lot of sense to do so in today's economic environment.
Also, I don't agree with this statement: The fact is every dollar spent in rent today is equal to almost double, possibly more in fifteen years of potential equity you could have had if you purchased. History shows us that.
Maybe you are referencing the pre-bubble years? - when people were taking out equity lines of credit because the "house increased in value" and then waking up the next year to realize their house isn't work what their line was (or 1/2 of what it used to be). And the same could be said about realizing equity gains...you wouldn't realize them until you sold. Then, you'd have to turn around and most likely buy a new place that also exceeded in value so you're equity really just kept you up with inflation.
History shows us that cash is king, and right now the housing market is the joker.
07-28-2011 04:01 AM
I'm not going to justify the market to you or whether you should buy now. That's up to you. Keep in mind that if interest rates go up and housing prices go down, you may actually end up paying more over the life of your loan. If you're able to pay cash and still have enough left over for upkeep, emergencies and all of the curve balls that life throws at you then you are indeed in a good position. Keep your eye on August 2nd because what the government does/doesn't do could have a huge impact on all of our wallets. Best of luck.
07-29-2011 09:31 PM
I noted your comparison on renting vs owning.
are you accounting for the write offs one gains when filing as a homeowner though?
and that you are gaining equity as you pay off your mortgage
Not saying buying is for everyone, just pointing out that there are also a lot of tax benefits as a homeowner
07-30-2011 06:23 PM
08-20-2011 05:11 AM
you probably cant afford to buy a house or qualify for a loan that's why you keep complaining. buying a home is a long term investment not a fast investment. if you want fast take your chances at the casino where you can actually flush your money down the toilet. I bought mine 20% down outside my desired neighborhood just to step into the market a little less than 2yrs ago and i qualified for a mortgage rate of 4.75%. I myself purchased as a stepping stone to get to the neighborhood i want and my home was affordable to me. So it is true what you are saying about the prices dropping but what you cant comprehend is that the intrest rates are soooo low that this makes a impact on your mortgage and what I plan on doing to counter the failig housing market is to pay my house off 11yrs which i HIGHLY doeable for me.
you on the other hand u just complain instead of doing something or investing in america. if you chose to live in your apt for the rest of your life that's fine too. I lived in one all my life and chose to get out of it. Im sure your landlord loves having you pay for their mortgage (lol).
nothing beats pride in homeownership especially when you repair/decorate/maintain the home and grounds even if you had to settle for something outside of your ideal city. my city unfortunately i was priced out by yuppies and college students so yes my hometown never lost the value you post on here. cities/towns lose value depending on the neighbors. so if your neighbors lose their job and cant pay their mortgage that affects the price of the neighborhood.
best of luck to you in whatever you do.
08-20-2011 05:27 AM
seriously rego79 your looking in fall river.....hahahhahah fall river is not what it use to be that's why it's value dropped. tennants cant even pay their rents. I know this bc i have friends out there who own multi families...oh btw the further you live from boston the cheaper. Pls review my other post that explains how neighborhoods are price based on your neighbors.. hey fall river is only nice when theres a feast
and why in hell you would want to raise a family in fallriver is ridiculous.. like i said in my last post your landlord must love you but based on the city you live in im gonna say you live at your parents house with your wife and kids or her parents house probably listening to there negativity bc when they bought there home in the 70"s or 80's it was 30K or 40K and they could swing that on their factory waged job.
08-20-2011 05:32 AM
Hello 02155, I can afford to buy a home, my credit is as good as it gets, and I'm preapproved with Bank of America, but thanks for all your guesses. Like I said I'm not looking to make money by buying a home , I just don't want to lose money. I'm looking to buy when things bottom out in my area. If you can pay off your home in 11 years your doing better than most.