Oh, I certainly agree that the IO/NegAm/etc type loans have been horribly abused and a lot of people are really going to lose their shorts.
I don’t so much think people waiting to buy are going to bail out a housing decline – I think they are going to constantly buy during the decline causing a slow decline.
Prices are still going to drop, inflation is goign to eat away for several years, etc. IMHO. I personally just don’t believe prices are magically going to drop 40-50% overnight like so many people are waiting for. If you are hoping for your $600,000 house to be selling for $300,000 tomorrow – I think you are going to be eternally waiting.
In 7-9 years, in “real dollars” that may or may not be the case. But that’s a completely different concept then what so many people seem to be thinking.
Houses will go back to places you buy to live in, and not to flip for quick cash. Good thing.
Of the people I know, how did the ones with a lot of cash stock piled get it? All sorts of different ways really.
Some made a lot on stocks. Some made a lot on RE. One person moved back home with his family saving $5,000+ a month in order to buy (started about 6 years ago – he’s salivating for prices to go down and frequents these boards more then me!). Some just make a lot of money.
And if you are dual income, that only makes things easier. I’m not rich, none of my friends are. But we don’t try to live extravagent lifestyles we can’t afford.
Having decent paying jobs, living well below your means, and working hard to save money – thats how I try to get by at least.
Why buy as “the knife falls” as some will say? Like everything else in life, good luck timing the bottom. Anticipation will have its toll, tired of waiting, or just a sweet deal. There are advantages to a large inventory – your selection is much larger.
My one friend living at home saving like crazy has already begun creating his MLS “watch list” of properties he wants to check out as prices go down. You see the same thing mentioned all over the place on these forums.
For every X vultures that start circling above a carcass, a given number will give in and dive in for some food. I don’t know the formula, but I’m pretty certain this is what will take effect.
And at some point, trying to time the market only costs you. 5 years of rent at $1,500/mo is roughly $90,000 give or take some additional expenses. 10 years is $180,000… and so on.
(Ok, if your price range is the 1.5million mark like the poster above.. timing the market has a bit more of a consequence 🙂 ).
If you really want a house (and so many people who believe there is a bubble do – which says a lot for setiment) – then at some point the price and property will line up perfectly in your eyes.
People keep saving, even as house price stay the same or slowly go down.
But then again, who knows. When I bought this place a few years ago, I knew quite certain the housing party was not sustainable and would have a correction. But then again, that was about about $60,000 in money I would have spent on rent ago or something by now. And another 20+% “appreciation” (that I expect to go away) on my place.
Personally, I got sick of renting – sick of moving, tired of roomates, tired of being landlord. Owning, for me, is worth quite a bit of money just to not deal with all that other hassle. So I’m quite happy. 🙂
