Considering pulling the trigger

[socrattt]

[quote=bob2007]Opinions will vary widely. Stay 5-10 years, probably ok. Have to sell in less than 5 years, maybe a 10%ish type loss. To me, even if it costs me 10%, if my quality of life goes up (meaning I am happier overall), its worth it.[/quote]

Bob, this is speculation at its best. Do yourself a favor and try not to throw numbers out. A higher than 10% decline is much more likely and the chances are if the banks were forced to release inventory there would be a much greater decline in many areas.

I had a meeting with some bankers at Chase on Friday and we discussed the issue of inventory. Chase alone currently has over 350,000 homes off the market. Sounds like anyone trying to predict the market could be off by a large margin if you ask me.

If you are looking at a home purchase at any point as a financial investment do yourself a favor and rent. The market (real estate and economic markets) will change dramatically in the next 12-18 months, so just be weary of the potential issues when contemplating a purchase.

[DWCAP]

First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.

[DWCAP]

First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.

[DWCAP]

First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.

[DWCAP]

First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.

[DWCAP]

First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.

[mercedes7]

[quote=sdduuuude]Before considering rent a “waste” of money, one has to consider the value of flexibility. In uncertain times, the value of flexibility goes way up. Up to you to put a dollar amount on that.

Renting provides a low risk of being stuck in a bad position. Also, rent is only “wasted” if the underlying assets are appreciating. In the early years, the amount of money that goes to equity instead of interest is negligible.

If you are aiming “low” with your purchase, you might be OK – the magintidue of potential dollar losses goes down, and you are making a monthly payment similar to your rent. But if you are aiming to purchase a nicer place than you are currently renting, then your risk is increased.

I think waiting another year will help more than hurt. It’s an annoying buyers’ market and many economic indicators suggesting bad things are coming.

On the other hand, it seems nobody really cares if you default on the loan, so if you buy now and get stuck in a negative equity position, walking away is now the “in” thing to do so you don’t really have anytyhing to lose by buying. In case the market goes way down, you can always default, live rent free for a year, then bail. Consult your attorney first.[/quote]

Thank you for reminding me of this. You are right, it is so nice to have the freedom to pack up and move with a 30 day notice. I would not be stuck in a negative equity situation, since I would be putting 2/3 of the purchase price down and actually saving money over what I am paying in rent.

[mercedes7]

[quote=sdduuuude]Before considering rent a “waste” of money, one has to consider the value of flexibility. In uncertain times, the value of flexibility goes way up. Up to you to put a dollar amount on that.

Renting provides a low risk of being stuck in a bad position. Also, rent is only “wasted” if the underlying assets are appreciating. In the early years, the amount of money that goes to equity instead of interest is negligible.

If you are aiming “low” with your purchase, you might be OK – the magintidue of potential dollar losses goes down, and you are making a monthly payment similar to your rent. But if you are aiming to purchase a nicer place than you are currently renting, then your risk is increased.

I think waiting another year will help more than hurt. It’s an annoying buyers’ market and many economic indicators suggesting bad things are coming.

On the other hand, it seems nobody really cares if you default on the loan, so if you buy now and get stuck in a negative equity position, walking away is now the “in” thing to do so you don’t really have anytyhing to lose by buying. In case the market goes way down, you can always default, live rent free for a year, then bail. Consult your attorney first.[/quote]

Thank you for reminding me of this. You are right, it is so nice to have the freedom to pack up and move with a 30 day notice. I would not be stuck in a negative equity situation, since I would be putting 2/3 of the purchase price down and actually saving money over what I am paying in rent.

[mercedes7]

[quote=sdduuuude]Before considering rent a “waste” of money, one has to consider the value of flexibility. In uncertain times, the value of flexibility goes way up. Up to you to put a dollar amount on that.

Renting provides a low risk of being stuck in a bad position. Also, rent is only “wasted” if the underlying assets are appreciating. In the early years, the amount of money that goes to equity instead of interest is negligible.

If you are aiming “low” with your purchase, you might be OK – the magintidue of potential dollar losses goes down, and you are making a monthly payment similar to your rent. But if you are aiming to purchase a nicer place than you are currently renting, then your risk is increased.

I think waiting another year will help more than hurt. It’s an annoying buyers’ market and many economic indicators suggesting bad things are coming.

On the other hand, it seems nobody really cares if you default on the loan, so if you buy now and get stuck in a negative equity position, walking away is now the “in” thing to do so you don’t really have anytyhing to lose by buying. In case the market goes way down, you can always default, live rent free for a year, then bail. Consult your attorney first.[/quote]

Thank you for reminding me of this. You are right, it is so nice to have the freedom to pack up and move with a 30 day notice. I would not be stuck in a negative equity situation, since I would be putting 2/3 of the purchase price down and actually saving money over what I am paying in rent.

[mercedes7]

[quote=sdduuuude]Before considering rent a “waste” of money, one has to consider the value of flexibility. In uncertain times, the value of flexibility goes way up. Up to you to put a dollar amount on that.

Renting provides a low risk of being stuck in a bad position. Also, rent is only “wasted” if the underlying assets are appreciating. In the early years, the amount of money that goes to equity instead of interest is negligible.

If you are aiming “low” with your purchase, you might be OK – the magintidue of potential dollar losses goes down, and you are making a monthly payment similar to your rent. But if you are aiming to purchase a nicer place than you are currently renting, then your risk is increased.

I think waiting another year will help more than hurt. It’s an annoying buyers’ market and many economic indicators suggesting bad things are coming.

On the other hand, it seems nobody really cares if you default on the loan, so if you buy now and get stuck in a negative equity position, walking away is now the “in” thing to do so you don’t really have anytyhing to lose by buying. In case the market goes way down, you can always default, live rent free for a year, then bail. Consult your attorney first.[/quote]

Thank you for reminding me of this. You are right, it is so nice to have the freedom to pack up and move with a 30 day notice. I would not be stuck in a negative equity situation, since I would be putting 2/3 of the purchase price down and actually saving money over what I am paying in rent.

[mercedes7]

[quote=sdduuuude]Before considering rent a “waste” of money, one has to consider the value of flexibility. In uncertain times, the value of flexibility goes way up. Up to you to put a dollar amount on that.

Renting provides a low risk of being stuck in a bad position. Also, rent is only “wasted” if the underlying assets are appreciating. In the early years, the amount of money that goes to equity instead of interest is negligible.

If you are aiming “low” with your purchase, you might be OK – the magintidue of potential dollar losses goes down, and you are making a monthly payment similar to your rent. But if you are aiming to purchase a nicer place than you are currently renting, then your risk is increased.

I think waiting another year will help more than hurt. It’s an annoying buyers’ market and many economic indicators suggesting bad things are coming.

On the other hand, it seems nobody really cares if you default on the loan, so if you buy now and get stuck in a negative equity position, walking away is now the “in” thing to do so you don’t really have anytyhing to lose by buying. In case the market goes way down, you can always default, live rent free for a year, then bail. Consult your attorney first.[/quote]

Thank you for reminding me of this. You are right, it is so nice to have the freedom to pack up and move with a 30 day notice. I would not be stuck in a negative equity situation, since I would be putting 2/3 of the purchase price down and actually saving money over what I am paying in rent.

[mercedes7]

[quote=SD Realtor]The choice is a tough one. I think the doomsday people are getting antsy because not only have none of the prophecies come to fruition, but the conditions are actually improving. This is more the result of market manipulation then anything else but the numbers bear this out. As Rich posted in the resale data rodeo there are ALOT of factors in play here. For wannabe buyers the wariness should be with regards to interest rates. Will the bond market fall apart? Yes but not for quite awhile. Will the govt/fed/treasury/(insert your covert organization here) REALLY let the secondary market try to survive on its own? With all that the existing regime has at stake in this election year do you believe that they will let rates fall apart? Honestly? Personally I do not.

Another issue which is important is the type of home you are buying, the where, the size, the amount of existing inventory in that price range. How easy is it or will it be for you to find something like you found now.

What is fundamentally and without a doubt true is that over the past few years many many people who post here have purchased. Similarly those who have waited have indeed not only missed out on lower prices but also selection. Nobody can argue that prices are higher now and selection is worse if we are talking about homes under 700k. The boat is well off shore now. The question is when will it return.

Moral hazard is another issue the most bearish posters seem to ignore. Debt is being rewritten, washed away, worked out, scrubbed out, however you want to put it. Once again, those people who have been responsible, paid their bills, saved money and towed the line are screwed. How are they rewarded? Well, they get horrid rates on CDs and they get to see neighbors bailed out. Similarly they get to see institutionalized corrupted maintained and officers in those BAILED OUT institutions given bonuses.

The issue of standard of living is a personal one. There are those who post who love renting. I rent. I hate it but I do it. I sincerely regret not buying in 2008. There are those who hate renting and enjoy the benefits of owning a home and being able to do whatever they want to a home and not have to answer to a landlord.

**************

To me there is no doubt the market will come down again but only when the bond market clearly falls apart. I believe we have now grown into a nanny state/nation and that large scale foreclosure numbers will be blunted by “social programs” that will be “good for society”. We may have some minor ups and downs but I do not think you will see a big run downhill due to foreclosures and/or employment. I do believe that at some point in time we will have a fairly severe dislocation in the bond market that will have dire consequences for housing prices. However I think that is quite far off, a few years at least. So for the next couple years I think you are okay. Once bond market fluctuations and inflation kick in, hold on tight.

***********[/quote]
Thanks for your thoughts. I have (and still am) of the belief that prices SHOULD correct further, but am beginning to think that the government can and will do everthing in their power to prop housing up. I have waited for this ellusive shadow inventory that never seems to come. I thought of waiting to see what happens when the fed stops purchase of MBS, or when the tax credit expires (if it does), and then to see if the Option ARM recasts have an effect….on and on it goes. I still believe that the RE market has a much greater down side risk ahead. This is exactly what I needed to hear. Will think long and hard before I make the plunge.

[mercedes7]

[quote=SD Realtor]The choice is a tough one. I think the doomsday people are getting antsy because not only have none of the prophecies come to fruition, but the conditions are actually improving. This is more the result of market manipulation then anything else but the numbers bear this out. As Rich posted in the resale data rodeo there are ALOT of factors in play here. For wannabe buyers the wariness should be with regards to interest rates. Will the bond market fall apart? Yes but not for quite awhile. Will the govt/fed/treasury/(insert your covert organization here) REALLY let the secondary market try to survive on its own? With all that the existing regime has at stake in this election year do you believe that they will let rates fall apart? Honestly? Personally I do not.

Another issue which is important is the type of home you are buying, the where, the size, the amount of existing inventory in that price range. How easy is it or will it be for you to find something like you found now.

What is fundamentally and without a doubt true is that over the past few years many many people who post here have purchased. Similarly those who have waited have indeed not only missed out on lower prices but also selection. Nobody can argue that prices are higher now and selection is worse if we are talking about homes under 700k. The boat is well off shore now. The question is when will it return.

Moral hazard is another issue the most bearish posters seem to ignore. Debt is being rewritten, washed away, worked out, scrubbed out, however you want to put it. Once again, those people who have been responsible, paid their bills, saved money and towed the line are screwed. How are they rewarded? Well, they get horrid rates on CDs and they get to see neighbors bailed out. Similarly they get to see institutionalized corrupted maintained and officers in those BAILED OUT institutions given bonuses.

The issue of standard of living is a personal one. There are those who post who love renting. I rent. I hate it but I do it. I sincerely regret not buying in 2008. There are those who hate renting and enjoy the benefits of owning a home and being able to do whatever they want to a home and not have to answer to a landlord.

**************

To me there is no doubt the market will come down again but only when the bond market clearly falls apart. I believe we have now grown into a nanny state/nation and that large scale foreclosure numbers will be blunted by “social programs” that will be “good for society”. We may have some minor ups and downs but I do not think you will see a big run downhill due to foreclosures and/or employment. I do believe that at some point in time we will have a fairly severe dislocation in the bond market that will have dire consequences for housing prices. However I think that is quite far off, a few years at least. So for the next couple years I think you are okay. Once bond market fluctuations and inflation kick in, hold on tight.

***********[/quote]
Thanks for your thoughts. I have (and still am) of the belief that prices SHOULD correct further, but am beginning to think that the government can and will do everthing in their power to prop housing up. I have waited for this ellusive shadow inventory that never seems to come. I thought of waiting to see what happens when the fed stops purchase of MBS, or when the tax credit expires (if it does), and then to see if the Option ARM recasts have an effect….on and on it goes. I still believe that the RE market has a much greater down side risk ahead. This is exactly what I needed to hear. Will think long and hard before I make the plunge.

[mercedes7]

[quote=SD Realtor]The choice is a tough one. I think the doomsday people are getting antsy because not only have none of the prophecies come to fruition, but the conditions are actually improving. This is more the result of market manipulation then anything else but the numbers bear this out. As Rich posted in the resale data rodeo there are ALOT of factors in play here. For wannabe buyers the wariness should be with regards to interest rates. Will the bond market fall apart? Yes but not for quite awhile. Will the govt/fed/treasury/(insert your covert organization here) REALLY let the secondary market try to survive on its own? With all that the existing regime has at stake in this election year do you believe that they will let rates fall apart? Honestly? Personally I do not.

Another issue which is important is the type of home you are buying, the where, the size, the amount of existing inventory in that price range. How easy is it or will it be for you to find something like you found now.

What is fundamentally and without a doubt true is that over the past few years many many people who post here have purchased. Similarly those who have waited have indeed not only missed out on lower prices but also selection. Nobody can argue that prices are higher now and selection is worse if we are talking about homes under 700k. The boat is well off shore now. The question is when will it return.

Moral hazard is another issue the most bearish posters seem to ignore. Debt is being rewritten, washed away, worked out, scrubbed out, however you want to put it. Once again, those people who have been responsible, paid their bills, saved money and towed the line are screwed. How are they rewarded? Well, they get horrid rates on CDs and they get to see neighbors bailed out. Similarly they get to see institutionalized corrupted maintained and officers in those BAILED OUT institutions given bonuses.

The issue of standard of living is a personal one. There are those who post who love renting. I rent. I hate it but I do it. I sincerely regret not buying in 2008. There are those who hate renting and enjoy the benefits of owning a home and being able to do whatever they want to a home and not have to answer to a landlord.

**************

To me there is no doubt the market will come down again but only when the bond market clearly falls apart. I believe we have now grown into a nanny state/nation and that large scale foreclosure numbers will be blunted by “social programs” that will be “good for society”. We may have some minor ups and downs but I do not think you will see a big run downhill due to foreclosures and/or employment. I do believe that at some point in time we will have a fairly severe dislocation in the bond market that will have dire consequences for housing prices. However I think that is quite far off, a few years at least. So for the next couple years I think you are okay. Once bond market fluctuations and inflation kick in, hold on tight.

***********[/quote]
Thanks for your thoughts. I have (and still am) of the belief that prices SHOULD correct further, but am beginning to think that the government can and will do everthing in their power to prop housing up. I have waited for this ellusive shadow inventory that never seems to come. I thought of waiting to see what happens when the fed stops purchase of MBS, or when the tax credit expires (if it does), and then to see if the Option ARM recasts have an effect….on and on it goes. I still believe that the RE market has a much greater down side risk ahead. This is exactly what I needed to hear. Will think long and hard before I make the plunge.

[mercedes7]

[quote=SD Realtor]The choice is a tough one. I think the doomsday people are getting antsy because not only have none of the prophecies come to fruition, but the conditions are actually improving. This is more the result of market manipulation then anything else but the numbers bear this out. As Rich posted in the resale data rodeo there are ALOT of factors in play here. For wannabe buyers the wariness should be with regards to interest rates. Will the bond market fall apart? Yes but not for quite awhile. Will the govt/fed/treasury/(insert your covert organization here) REALLY let the secondary market try to survive on its own? With all that the existing regime has at stake in this election year do you believe that they will let rates fall apart? Honestly? Personally I do not.

Another issue which is important is the type of home you are buying, the where, the size, the amount of existing inventory in that price range. How easy is it or will it be for you to find something like you found now.

What is fundamentally and without a doubt true is that over the past few years many many people who post here have purchased. Similarly those who have waited have indeed not only missed out on lower prices but also selection. Nobody can argue that prices are higher now and selection is worse if we are talking about homes under 700k. The boat is well off shore now. The question is when will it return.

Moral hazard is another issue the most bearish posters seem to ignore. Debt is being rewritten, washed away, worked out, scrubbed out, however you want to put it. Once again, those people who have been responsible, paid their bills, saved money and towed the line are screwed. How are they rewarded? Well, they get horrid rates on CDs and they get to see neighbors bailed out. Similarly they get to see institutionalized corrupted maintained and officers in those BAILED OUT institutions given bonuses.

The issue of standard of living is a personal one. There are those who post who love renting. I rent. I hate it but I do it. I sincerely regret not buying in 2008. There are those who hate renting and enjoy the benefits of owning a home and being able to do whatever they want to a home and not have to answer to a landlord.

**************

To me there is no doubt the market will come down again but only when the bond market clearly falls apart. I believe we have now grown into a nanny state/nation and that large scale foreclosure numbers will be blunted by “social programs” that will be “good for society”. We may have some minor ups and downs but I do not think you will see a big run downhill due to foreclosures and/or employment. I do believe that at some point in time we will have a fairly severe dislocation in the bond market that will have dire consequences for housing prices. However I think that is quite far off, a few years at least. So for the next couple years I think you are okay. Once bond market fluctuations and inflation kick in, hold on tight.

***********[/quote]
Thanks for your thoughts. I have (and still am) of the belief that prices SHOULD correct further, but am beginning to think that the government can and will do everthing in their power to prop housing up. I have waited for this ellusive shadow inventory that never seems to come. I thought of waiting to see what happens when the fed stops purchase of MBS, or when the tax credit expires (if it does), and then to see if the Option ARM recasts have an effect….on and on it goes. I still believe that the RE market has a much greater down side risk ahead. This is exactly what I needed to hear. Will think long and hard before I make the plunge.

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