Long time Pigg viewer is trying to run the numbers.

[Stu949]

I’m convinced real estate prices will continue lower, and with the proposed mortgage bailouts, real estae may go sideways for a long time – the Gov will just extend the time it takes to get back to affordable levels.

With that said, the wife and I have been waiting for almost 5 years now. We pay 55% of our income to the Gov, and we’re renters who can now afford the median priced house in the OC (on 30-yr fixed). Yeah, we have thought about moving out of state (as we could care less for the OC), but our jobs are here and our family is here.

We pay $2,600 a month to rent a 3 bed/2 bath detached house in Mission Viejo. A little high, but we have a view and we have 2 cats and 2 dogs (making us less desirable renters).

If we get a mortgage for $3,000 a month; after taxes, I figure our effective payment is $2,100. The wife, like other Pigg’s wives, wants to buy. I’ve said the first question should be, can I live in this for 15 or 20 years and be happy with it? So, if that is not the case, we won’t even consider buying. We’ve been looking and have not really seen anything that passes this test.

My question: If we do find something that meets this test, and our effective payment is less than our rent, should be we pull the trigger? I know prices will continue down, but from a payment prespective, we look like we would do better. Am I missing something?

I’m also thinking it would be better to wait until the end of 2009 at the earliest, but I’m wondering how much that will really pay off. We’ve run Turbo Tax, assuming a $550,000 mortgage, and we definitely don’t pay as much in tax (we included PMI, insurance, and property taxes). We figure we net $500 a month back in our pocket by buying a $550,000 house. Yes, prices will continue lower, but I don’t think it will bottom for a while – what to do?

I saw TG’s post about his purchase, and was trying to compare if and when our situation would make the same sense. Thanks for any and all comments.

[sdduuuude]

I’d say Temecula is significantly ahead of the OC in the cycle. I’d say TG’s purchase does not apply.

I think you are right about the bailouts slowing down the process. I can imagine how frustrating it is for folks like you.

I’d guess late 2009 would buy you quite a bit if you are looking above the condo/small house level.

[sdduuuude]

I’d say Temecula is significantly ahead of the OC in the cycle. I’d say TG’s purchase does not apply.

I think you are right about the bailouts slowing down the process. I can imagine how frustrating it is for folks like you.

I’d guess late 2009 would buy you quite a bit if you are looking above the condo/small house level.

[sdduuuude]

I’d say Temecula is significantly ahead of the OC in the cycle. I’d say TG’s purchase does not apply.

I think you are right about the bailouts slowing down the process. I can imagine how frustrating it is for folks like you.

I’d guess late 2009 would buy you quite a bit if you are looking above the condo/small house level.

[sdduuuude]

I’d say Temecula is significantly ahead of the OC in the cycle. I’d say TG’s purchase does not apply.

I think you are right about the bailouts slowing down the process. I can imagine how frustrating it is for folks like you.

I’d guess late 2009 would buy you quite a bit if you are looking above the condo/small house level.

[sdduuuude]

I’d say Temecula is significantly ahead of the OC in the cycle. I’d say TG’s purchase does not apply.

I think you are right about the bailouts slowing down the process. I can imagine how frustrating it is for folks like you.

I’d guess late 2009 would buy you quite a bit if you are looking above the condo/small house level.

[peterb]

Wait until June 2009 and see how you feel. RE prices are going down and unemployment is rising.Time is on your side, if you dont own right now. 2009 is looking to be way worse than 2008. Despite Uncle Sams efforts.

[peterb]

Wait until June 2009 and see how you feel. RE prices are going down and unemployment is rising.Time is on your side, if you dont own right now. 2009 is looking to be way worse than 2008. Despite Uncle Sams efforts.

[peterb]

Wait until June 2009 and see how you feel. RE prices are going down and unemployment is rising.Time is on your side, if you dont own right now. 2009 is looking to be way worse than 2008. Despite Uncle Sams efforts.

[peterb]

Wait until June 2009 and see how you feel. RE prices are going down and unemployment is rising.Time is on your side, if you dont own right now. 2009 is looking to be way worse than 2008. Despite Uncle Sams efforts.

[peterb]

Wait until June 2009 and see how you feel. RE prices are going down and unemployment is rising.Time is on your side, if you dont own right now. 2009 is looking to be way worse than 2008. Despite Uncle Sams efforts.

[Fletch]

peterb- I’m interested to know why you’re thinking that the Govt’s newly announced plan doesn’t stop the drop and push prices sideways. Is it simply a lack of faith that the Gov’t can do anything right? I share this sentiment in the long term, but I wonder: if they succeed in stemming foreclosures through payment reductions (be it interest rate or principal reductions) and moratoriums, won’t that indeed cause a leveling of prices, near term?

(You may recall I decided to sell my house a few months ago before I got into a negative equity situation and I appreciated your comments then. I’m hoping the fact that I’m now debt-free with a solid job is a better position to be in then counting on the aforementioned Gov’t homeowner rescue. )

[Fletch]

peterb- I’m interested to know why you’re thinking that the Govt’s newly announced plan doesn’t stop the drop and push prices sideways. Is it simply a lack of faith that the Gov’t can do anything right? I share this sentiment in the long term, but I wonder: if they succeed in stemming foreclosures through payment reductions (be it interest rate or principal reductions) and moratoriums, won’t that indeed cause a leveling of prices, near term?

(You may recall I decided to sell my house a few months ago before I got into a negative equity situation and I appreciated your comments then. I’m hoping the fact that I’m now debt-free with a solid job is a better position to be in then counting on the aforementioned Gov’t homeowner rescue. )

[Fletch]

peterb- I’m interested to know why you’re thinking that the Govt’s newly announced plan doesn’t stop the drop and push prices sideways. Is it simply a lack of faith that the Gov’t can do anything right? I share this sentiment in the long term, but I wonder: if they succeed in stemming foreclosures through payment reductions (be it interest rate or principal reductions) and moratoriums, won’t that indeed cause a leveling of prices, near term?

(You may recall I decided to sell my house a few months ago before I got into a negative equity situation and I appreciated your comments then. I’m hoping the fact that I’m now debt-free with a solid job is a better position to be in then counting on the aforementioned Gov’t homeowner rescue. )

[Fletch]

peterb- I’m interested to know why you’re thinking that the Govt’s newly announced plan doesn’t stop the drop and push prices sideways. Is it simply a lack of faith that the Gov’t can do anything right? I share this sentiment in the long term, but I wonder: if they succeed in stemming foreclosures through payment reductions (be it interest rate or principal reductions) and moratoriums, won’t that indeed cause a leveling of prices, near term?

(You may recall I decided to sell my house a few months ago before I got into a negative equity situation and I appreciated your comments then. I’m hoping the fact that I’m now debt-free with a solid job is a better position to be in then counting on the aforementioned Gov’t homeowner rescue. )

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