I really really hope that prices go down by 20-30 per cent as I save up my down payment for my first home here in southern California. It sucks because I am now finally making a decent living and will get nailed on my taxes. But at least my rent is only $550 a month since I am renting a small room in a house in Ventura close to my job. Then again even if I was rich and could buy a new home for a million bucks at the insane prices today if I was layed off tomorrow it would be a disaster. One can never know if work is secure anymore which makes home buying risky. The only real irritant are my lucky bastard co-workers who bought years ago and brag about how much their homes are worth. One guy is trying to sell his place that he paid 500k for years ago for 1.1 million.
I agree dumb asses with money will always buy homes and overpay. Case in point- the filthy rich neighbor of my co-worker who wants to sell his place in Moorpark near Ventura in San Fernando Valley is willing to overpay on a home for his son.
Well I will sit this one out a few years on the side lines. Since I had to do a chapter 7 BK this past year due to a layoff I cannot even think about buying a home without a major cash down payment in 1-2 years. SO I will bite the bullet and save save save and pray to keep my new job and not piss off my roommate in Ventura to keep the cheap rent.
Which is better?
Case 1
Income after taxes (no home)
100k cash after expenses (based on 200k income)
rent=550/month for small furnished room in Ventura
20k toward 401k
Case 2
Buy new home at 900k
Income 200k before taxes
