What will it take to get you to buy a house?

[cr]

lol JWM,

I’ll answer: when prices drop 40%. If they don’t drop that far before they start going up, but right now things aren’t good for prices.

[kev374]

for me personally…when price reach 2001 or 2002 levels I will feel comfortable to get into the market. Regardless of what I can afford I want to be able to see reversion to some kind of historical average or “reversion to mean” as they call it.

I’m with Goldman Sachs on this one, will wait for a 40% from the current median. This implies around 2002 prices, as per Dataquick OC median was somewhere in the low 300s I believe.. 312k or so. I believe the national median would go down to around $150-160k or so and that would make OC double the national average, sounds about right, even though OC does not nearly have double the national income!

If you think about it 312k under 28/36 ratio and 20% down is still VERY expensive, I mean people need to have $63,000 cash to put down and another $10,000 in closing costs and what about additional expenses..emergency fund, moving etc. but then again OC is an expensive place to live.

Who knows, it may go down more to the mid-high 200s if foreclosures skyrocket because of the ARM tsunami ahead of us and financing dries up even more! I’m trying to be conservative with the 40% drop estimate.

[kev374]

for me personally…when price reach 2001 or 2002 levels I will feel comfortable to get into the market. Regardless of what I can afford I want to be able to see reversion to some kind of historical average or “reversion to mean” as they call it.

I’m with Goldman Sachs on this one, will wait for a 40% from the current median. This implies around 2002 prices, as per Dataquick OC median was somewhere in the low 300s I believe.. 312k or so. I believe the national median would go down to around $150-160k or so and that would make OC double the national average, sounds about right, even though OC does not nearly have double the national income!

If you think about it 312k under 28/36 ratio and 20% down is still VERY expensive, I mean people need to have $63,000 cash to put down and another $10,000 in closing costs and what about additional expenses..emergency fund, moving etc. but then again OC is an expensive place to live.

Who knows, it may go down more to the mid-high 200s if foreclosures skyrocket because of the ARM tsunami ahead of us and financing dries up even more! I’m trying to be conservative with the 40% drop estimate.

[kev374]

for me personally…when price reach 2001 or 2002 levels I will feel comfortable to get into the market. Regardless of what I can afford I want to be able to see reversion to some kind of historical average or “reversion to mean” as they call it.

I’m with Goldman Sachs on this one, will wait for a 40% from the current median. This implies around 2002 prices, as per Dataquick OC median was somewhere in the low 300s I believe.. 312k or so. I believe the national median would go down to around $150-160k or so and that would make OC double the national average, sounds about right, even though OC does not nearly have double the national income!

If you think about it 312k under 28/36 ratio and 20% down is still VERY expensive, I mean people need to have $63,000 cash to put down and another $10,000 in closing costs and what about additional expenses..emergency fund, moving etc. but then again OC is an expensive place to live.

Who knows, it may go down more to the mid-high 200s if foreclosures skyrocket because of the ARM tsunami ahead of us and financing dries up even more! I’m trying to be conservative with the 40% drop estimate.

[kev374]

for me personally…when price reach 2001 or 2002 levels I will feel comfortable to get into the market. Regardless of what I can afford I want to be able to see reversion to some kind of historical average or “reversion to mean” as they call it.

I’m with Goldman Sachs on this one, will wait for a 40% from the current median. This implies around 2002 prices, as per Dataquick OC median was somewhere in the low 300s I believe.. 312k or so. I believe the national median would go down to around $150-160k or so and that would make OC double the national average, sounds about right, even though OC does not nearly have double the national income!

If you think about it 312k under 28/36 ratio and 20% down is still VERY expensive, I mean people need to have $63,000 cash to put down and another $10,000 in closing costs and what about additional expenses..emergency fund, moving etc. but then again OC is an expensive place to live.

Who knows, it may go down more to the mid-high 200s if foreclosures skyrocket because of the ARM tsunami ahead of us and financing dries up even more! I’m trying to be conservative with the 40% drop estimate.

[kev374]

for me personally…when price reach 2001 or 2002 levels I will feel comfortable to get into the market. Regardless of what I can afford I want to be able to see reversion to some kind of historical average or “reversion to mean” as they call it.

I’m with Goldman Sachs on this one, will wait for a 40% from the current median. This implies around 2002 prices, as per Dataquick OC median was somewhere in the low 300s I believe.. 312k or so. I believe the national median would go down to around $150-160k or so and that would make OC double the national average, sounds about right, even though OC does not nearly have double the national income!

If you think about it 312k under 28/36 ratio and 20% down is still VERY expensive, I mean people need to have $63,000 cash to put down and another $10,000 in closing costs and what about additional expenses..emergency fund, moving etc. but then again OC is an expensive place to live.

Who knows, it may go down more to the mid-high 200s if foreclosures skyrocket because of the ARM tsunami ahead of us and financing dries up even more! I’m trying to be conservative with the 40% drop estimate.

[XBoxBoy]

I suggest waiting as long as you can manage, or until it becomes quite clear we have hit bottom. One thing to keep in mind is that Real Estate cycles change very slowly. When we do hit bottom, you will have several years to figure out that we’re at the bottom and to find a place to buy. Nothing will come shooting back up rapidly. And if it does, stay away!!! It’s a bouncing knife!!!

[XBoxBoy]

I suggest waiting as long as you can manage, or until it becomes quite clear we have hit bottom. One thing to keep in mind is that Real Estate cycles change very slowly. When we do hit bottom, you will have several years to figure out that we’re at the bottom and to find a place to buy. Nothing will come shooting back up rapidly. And if it does, stay away!!! It’s a bouncing knife!!!

[XBoxBoy]

I suggest waiting as long as you can manage, or until it becomes quite clear we have hit bottom. One thing to keep in mind is that Real Estate cycles change very slowly. When we do hit bottom, you will have several years to figure out that we’re at the bottom and to find a place to buy. Nothing will come shooting back up rapidly. And if it does, stay away!!! It’s a bouncing knife!!!

[XBoxBoy]

I suggest waiting as long as you can manage, or until it becomes quite clear we have hit bottom. One thing to keep in mind is that Real Estate cycles change very slowly. When we do hit bottom, you will have several years to figure out that we’re at the bottom and to find a place to buy. Nothing will come shooting back up rapidly. And if it does, stay away!!! It’s a bouncing knife!!!

[XBoxBoy]

I suggest waiting as long as you can manage, or until it becomes quite clear we have hit bottom. One thing to keep in mind is that Real Estate cycles change very slowly. When we do hit bottom, you will have several years to figure out that we’re at the bottom and to find a place to buy. Nothing will come shooting back up rapidly. And if it does, stay away!!! It’s a bouncing knife!!!

[patb]

Use these tests to look for to buy a house/condo

1) Is the cost close to current construction costs, if it’s a premium hold,
if it’s a discount, adjust for condition.

2) Will the unit cash flow to give a cap rate close to Prime.
if it’s not above prime, leave it in the bank

3) have costs reverted to the trend adjusted line for case-shiller.
if it’s at or below the trend line, it’s probably close to a market resistance
point.

4) Are there cover stories in Time Magazine saying “Housing, the bane
of the middle class and “Why renting a trailer is such a good idea”

The time cover is my sign to exit.

[patb]

Use these tests to look for to buy a house/condo

1) Is the cost close to current construction costs, if it’s a premium hold,
if it’s a discount, adjust for condition.

2) Will the unit cash flow to give a cap rate close to Prime.
if it’s not above prime, leave it in the bank

3) have costs reverted to the trend adjusted line for case-shiller.
if it’s at or below the trend line, it’s probably close to a market resistance
point.

4) Are there cover stories in Time Magazine saying “Housing, the bane
of the middle class and “Why renting a trailer is such a good idea”

The time cover is my sign to exit.

[patb]

Use these tests to look for to buy a house/condo

1) Is the cost close to current construction costs, if it’s a premium hold,
if it’s a discount, adjust for condition.

2) Will the unit cash flow to give a cap rate close to Prime.
if it’s not above prime, leave it in the bank

3) have costs reverted to the trend adjusted line for case-shiller.
if it’s at or below the trend line, it’s probably close to a market resistance
point.

4) Are there cover stories in Time Magazine saying “Housing, the bane
of the middle class and “Why renting a trailer is such a good idea”

The time cover is my sign to exit.

[patb]

Use these tests to look for to buy a house/condo

1) Is the cost close to current construction costs, if it’s a premium hold,
if it’s a discount, adjust for condition.

2) Will the unit cash flow to give a cap rate close to Prime.
if it’s not above prime, leave it in the bank

3) have costs reverted to the trend adjusted line for case-shiller.
if it’s at or below the trend line, it’s probably close to a market resistance
point.

4) Are there cover stories in Time Magazine saying “Housing, the bane
of the middle class and “Why renting a trailer is such a good idea”

The time cover is my sign to exit.

[Author]

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