Thanks for the support Ca renter, i was certain i would incite some bashing with my position. I made some assumptions about pd and the original post. Pd has posted in the past and from those posts I assume he/she works for the public defender’s office or alternate public defenders office, either way 100k is a fair assumption at income, which is a very stable and recession proof job not to mention the pension. A 200k purchase with a down payment puts the mortgage in the 10-20% of income bracket, which is laughable that it would even cause heartache. As long as you think of it as a living expense and not an investment, who cares what the appeciation is since it leaves so much disposable income that other true investments can be pursued.
The other issue I want to address is the fear that low prices will lead to neighborhood collapse. I think this is a flawed argument. I have driven by many of the screaming deals that I didn’t act on and I notice that these buyers of fire sale priced homes have the funds to actually improve these properties and improve the neighborhood. I think the credit crunch is having the reverse effect that people feared. Knuckleheads that have a penchant for yard appliances, monster trucks and free range pit bulls cannot buy at half the price but they could buy in 2005, those that can buy now have more disposable income than their counterparts who bought at peak. The fear that throngs of dirtbags are waiting in the wings to buy at lower prices thus far is unsubstantiated and landscaping, rennovation and improvements are underway at the bargain bought homes. 2008 buyers, or “reset buyers” are the best thing to happen to some of these streets, backyards are going in for the first time in these vintage 2005 properties. Outsiders may view these half priced homes as a potential downward pull on the hood but they are proving to have the opposite effect.
Look at the example we are presented with, will pd bring down the neighborhood or improve it? Don’t ever think that overinflated prices serve as neighborhood insurance, financially undistressed owners is the answer to that problem.
