“Past performance is no guarantee of future results.”
This concept is not lost on me one bit, I am fully aware of all the factors that go into the future economics of this whole thing, so many factors that cannot be “guessed” at. I’m also fully aware how critical timing is on this…. but to me, timing is MOST critical in a volitile market (Cali is volitile)- buy at a peak (2005) and you’re going to need most of those 30 years to make up for the loss. Buy at a valley (1997) and you’re going to blow away the markets as a whole (300%??). Whereas in a stable, slowly appreciating commodity(Georgia?), your timing becomes less critical – 3 to 4% ever year, doesn’t matter so much when you jump in. Could things change? Of course, but you have to start somehwere.
I agree that you choose a city first, then find a home. If all other things were even close to equal, San Diego would be the only choice. But as it stands right now, I’m fairly sure we cannot afford to buy anything remotely acceptible in this area, unless prices come down 33%. For $300K here, you can’t buy anything to raise a family in a neighborhood I can live in. For $500K your options are still very limited. When those $600K places start selling for $400K, they’ll be in my ballpark. I won’t do a suicide loan just to squeeze into something I want, I’ve seen first hand the carnage that creates. I can wait it out, but not forever. I’m almost 40 and don’t have much savings, I need to get this one right, and I don’t have a ton of time to make it up if I botch this decision.
Some people think that 33% is possible, some say more, some say less. Who knows. Who can even accurately say HOW it will happen – one big dump over two or three years, or 15 years of pricing stagnation? We all have to make our predictions and cast our lot. I’m just looking for accurate data to help me run the options. Thanks to everyone who has responded already… the discussion is invaluable to me. 🙂
