You’d have to be an idiot to buy a house

[scaredyclassic]

scaredycat is just the truth. I’d hate to get my tail caught in the doorway. I liek to imagine i’m flexible and free to move around, but cautious, like a feral cat, untrusting, wary. perhaps even a vicious when cornered. further to fall could really make my life miserable not in terms of the lost money, but just in the sense that i am trapped. it would be very difficult for me personally mentally to just stop paying. the oranges at the fruit stand explanation makes sense to me. just cause the fruit guy says dont sweat it, you can make payemnts, oranges ar egonna cost more later anyway, doesn’t make me feel any better about the price at the transaction.

I am a “real person” who wants to live ina “reaosnably priced home I can afford”, but I’m alos a real person who’d liek to be able to sell teh house for what i paid for in 7 years or less, not make a profit, just be able to get out from under. I don’t have faith that that will be. I mean, houses are going for what people paid 10 years ago. maybe even more in some cases. Imight freaking want to move at some point int he future.

[TheBreeze]

scaredycat,

My advice is to do whatever makes you feel comfortable. It’s not like you ever even have to buy a house if you don’t want to. There’s nothing wrong with being a life-long renter. You’ll certainly have more flexibility that way.

Scarlet makes a good point about supply being kept artificially limited. Banks certainly appear to be hoarding supply in order to keep prices up. Also, I think the advice to be wary of RE cheerleaders who have recently bought is good.

Another poster above mentioned that interest rates are unlikely to be this low in the future. That’s probably true as I just read an article that said the government (Fannie, Freddie, FHA, etc) is 87% of the mortgage market now. So not only do you have artificially limited supply, you also have the government artificially inducing demand through below-market interest rates, below-market down payments, and below-market underwriting standards.

In summary, listen to what everyone has to say, but make your own decisions. Don’t let anyone push you, scare you, or cajole you into buying. Whatever you decide, it will only be you who will have to live with it.

Here’s an excerpt from that article I mentioned above:

The principal actors in the market today are the nationalized housing-finance companies, Fannie Mae and Freddie Mac, which purchase mortgage loans. In third place stands the Federal Housing Administration, which insures loans originated by private lenders. All together, the government sector accounts for 87 percent of the mortgages currently being made, says Guy Cecala, chief executive and publisher of Inside Mortgage Finance Publications in Bethesda. Purely private financing is expensive and scarce.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/14/AR2009031400055.html

Could you imagine if the government pulled out of the mortgage market completely? Housing prices would probably collapse another 50%. This is unlikely to happen, but anyone who thinks they are buying into a fair, unmanipulated market is fooling themselves.

[TheBreeze]

scaredycat,

My advice is to do whatever makes you feel comfortable. It’s not like you ever even have to buy a house if you don’t want to. There’s nothing wrong with being a life-long renter. You’ll certainly have more flexibility that way.

Scarlet makes a good point about supply being kept artificially limited. Banks certainly appear to be hoarding supply in order to keep prices up. Also, I think the advice to be wary of RE cheerleaders who have recently bought is good.

Another poster above mentioned that interest rates are unlikely to be this low in the future. That’s probably true as I just read an article that said the government (Fannie, Freddie, FHA, etc) is 87% of the mortgage market now. So not only do you have artificially limited supply, you also have the government artificially inducing demand through below-market interest rates, below-market down payments, and below-market underwriting standards.

In summary, listen to what everyone has to say, but make your own decisions. Don’t let anyone push you, scare you, or cajole you into buying. Whatever you decide, it will only be you who will have to live with it.

Here’s an excerpt from that article I mentioned above:

The principal actors in the market today are the nationalized housing-finance companies, Fannie Mae and Freddie Mac, which purchase mortgage loans. In third place stands the Federal Housing Administration, which insures loans originated by private lenders. All together, the government sector accounts for 87 percent of the mortgages currently being made, says Guy Cecala, chief executive and publisher of Inside Mortgage Finance Publications in Bethesda. Purely private financing is expensive and scarce.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/14/AR2009031400055.html

Could you imagine if the government pulled out of the mortgage market completely? Housing prices would probably collapse another 50%. This is unlikely to happen, but anyone who thinks they are buying into a fair, unmanipulated market is fooling themselves.

[TheBreeze]

scaredycat,

My advice is to do whatever makes you feel comfortable. It’s not like you ever even have to buy a house if you don’t want to. There’s nothing wrong with being a life-long renter. You’ll certainly have more flexibility that way.

Scarlet makes a good point about supply being kept artificially limited. Banks certainly appear to be hoarding supply in order to keep prices up. Also, I think the advice to be wary of RE cheerleaders who have recently bought is good.

Another poster above mentioned that interest rates are unlikely to be this low in the future. That’s probably true as I just read an article that said the government (Fannie, Freddie, FHA, etc) is 87% of the mortgage market now. So not only do you have artificially limited supply, you also have the government artificially inducing demand through below-market interest rates, below-market down payments, and below-market underwriting standards.

In summary, listen to what everyone has to say, but make your own decisions. Don’t let anyone push you, scare you, or cajole you into buying. Whatever you decide, it will only be you who will have to live with it.

Here’s an excerpt from that article I mentioned above:

The principal actors in the market today are the nationalized housing-finance companies, Fannie Mae and Freddie Mac, which purchase mortgage loans. In third place stands the Federal Housing Administration, which insures loans originated by private lenders. All together, the government sector accounts for 87 percent of the mortgages currently being made, says Guy Cecala, chief executive and publisher of Inside Mortgage Finance Publications in Bethesda. Purely private financing is expensive and scarce.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/14/AR2009031400055.html

Could you imagine if the government pulled out of the mortgage market completely? Housing prices would probably collapse another 50%. This is unlikely to happen, but anyone who thinks they are buying into a fair, unmanipulated market is fooling themselves.

[TheBreeze]

scaredycat,

My advice is to do whatever makes you feel comfortable. It’s not like you ever even have to buy a house if you don’t want to. There’s nothing wrong with being a life-long renter. You’ll certainly have more flexibility that way.

Scarlet makes a good point about supply being kept artificially limited. Banks certainly appear to be hoarding supply in order to keep prices up. Also, I think the advice to be wary of RE cheerleaders who have recently bought is good.

Another poster above mentioned that interest rates are unlikely to be this low in the future. That’s probably true as I just read an article that said the government (Fannie, Freddie, FHA, etc) is 87% of the mortgage market now. So not only do you have artificially limited supply, you also have the government artificially inducing demand through below-market interest rates, below-market down payments, and below-market underwriting standards.

In summary, listen to what everyone has to say, but make your own decisions. Don’t let anyone push you, scare you, or cajole you into buying. Whatever you decide, it will only be you who will have to live with it.

Here’s an excerpt from that article I mentioned above:

The principal actors in the market today are the nationalized housing-finance companies, Fannie Mae and Freddie Mac, which purchase mortgage loans. In third place stands the Federal Housing Administration, which insures loans originated by private lenders. All together, the government sector accounts for 87 percent of the mortgages currently being made, says Guy Cecala, chief executive and publisher of Inside Mortgage Finance Publications in Bethesda. Purely private financing is expensive and scarce.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/14/AR2009031400055.html

Could you imagine if the government pulled out of the mortgage market completely? Housing prices would probably collapse another 50%. This is unlikely to happen, but anyone who thinks they are buying into a fair, unmanipulated market is fooling themselves.

[TheBreeze]

scaredycat,

My advice is to do whatever makes you feel comfortable. It’s not like you ever even have to buy a house if you don’t want to. There’s nothing wrong with being a life-long renter. You’ll certainly have more flexibility that way.

Scarlet makes a good point about supply being kept artificially limited. Banks certainly appear to be hoarding supply in order to keep prices up. Also, I think the advice to be wary of RE cheerleaders who have recently bought is good.

Another poster above mentioned that interest rates are unlikely to be this low in the future. That’s probably true as I just read an article that said the government (Fannie, Freddie, FHA, etc) is 87% of the mortgage market now. So not only do you have artificially limited supply, you also have the government artificially inducing demand through below-market interest rates, below-market down payments, and below-market underwriting standards.

In summary, listen to what everyone has to say, but make your own decisions. Don’t let anyone push you, scare you, or cajole you into buying. Whatever you decide, it will only be you who will have to live with it.

Here’s an excerpt from that article I mentioned above:

The principal actors in the market today are the nationalized housing-finance companies, Fannie Mae and Freddie Mac, which purchase mortgage loans. In third place stands the Federal Housing Administration, which insures loans originated by private lenders. All together, the government sector accounts for 87 percent of the mortgages currently being made, says Guy Cecala, chief executive and publisher of Inside Mortgage Finance Publications in Bethesda. Purely private financing is expensive and scarce.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/14/AR2009031400055.html

Could you imagine if the government pulled out of the mortgage market completely? Housing prices would probably collapse another 50%. This is unlikely to happen, but anyone who thinks they are buying into a fair, unmanipulated market is fooling themselves.

[PKMAN]

I guess I’m not just an idiot, I’m a big-time idiot. I’m buying with way more than 20% down. I sold my previous home near the high point in 2004 and have been renting ever since. With the money I made on that sale + 5 years of interests earned, I’m able to buy a home nearly twice as big while paying only about $300 more per month in mortgage (actually just $150 more, considering that the new home’s HOA fee is a lot cheaper than the old townhouse community).

As a renter, I didn’t feel as attached to my home. As a renter, I didn’t feel like taking on any project to further beautify my home. As a renter, I could never forget the fact that I’m a renter with no sense of belonging.

The math worked out. The location is ideal. The home and the community are just what I’ve always wanted. I guess I’m a calculated and satisfied idiot.

[PKMAN]

I guess I’m not just an idiot, I’m a big-time idiot. I’m buying with way more than 20% down. I sold my previous home near the high point in 2004 and have been renting ever since. With the money I made on that sale + 5 years of interests earned, I’m able to buy a home nearly twice as big while paying only about $300 more per month in mortgage (actually just $150 more, considering that the new home’s HOA fee is a lot cheaper than the old townhouse community).

As a renter, I didn’t feel as attached to my home. As a renter, I didn’t feel like taking on any project to further beautify my home. As a renter, I could never forget the fact that I’m a renter with no sense of belonging.

The math worked out. The location is ideal. The home and the community are just what I’ve always wanted. I guess I’m a calculated and satisfied idiot.

[PKMAN]

I guess I’m not just an idiot, I’m a big-time idiot. I’m buying with way more than 20% down. I sold my previous home near the high point in 2004 and have been renting ever since. With the money I made on that sale + 5 years of interests earned, I’m able to buy a home nearly twice as big while paying only about $300 more per month in mortgage (actually just $150 more, considering that the new home’s HOA fee is a lot cheaper than the old townhouse community).

As a renter, I didn’t feel as attached to my home. As a renter, I didn’t feel like taking on any project to further beautify my home. As a renter, I could never forget the fact that I’m a renter with no sense of belonging.

The math worked out. The location is ideal. The home and the community are just what I’ve always wanted. I guess I’m a calculated and satisfied idiot.

[PKMAN]

I guess I’m not just an idiot, I’m a big-time idiot. I’m buying with way more than 20% down. I sold my previous home near the high point in 2004 and have been renting ever since. With the money I made on that sale + 5 years of interests earned, I’m able to buy a home nearly twice as big while paying only about $300 more per month in mortgage (actually just $150 more, considering that the new home’s HOA fee is a lot cheaper than the old townhouse community).

As a renter, I didn’t feel as attached to my home. As a renter, I didn’t feel like taking on any project to further beautify my home. As a renter, I could never forget the fact that I’m a renter with no sense of belonging.

The math worked out. The location is ideal. The home and the community are just what I’ve always wanted. I guess I’m a calculated and satisfied idiot.

[PKMAN]

I guess I’m not just an idiot, I’m a big-time idiot. I’m buying with way more than 20% down. I sold my previous home near the high point in 2004 and have been renting ever since. With the money I made on that sale + 5 years of interests earned, I’m able to buy a home nearly twice as big while paying only about $300 more per month in mortgage (actually just $150 more, considering that the new home’s HOA fee is a lot cheaper than the old townhouse community).

As a renter, I didn’t feel as attached to my home. As a renter, I didn’t feel like taking on any project to further beautify my home. As a renter, I could never forget the fact that I’m a renter with no sense of belonging.

The math worked out. The location is ideal. The home and the community are just what I’ve always wanted. I guess I’m a calculated and satisfied idiot.

[SD Realtor]

I am in between… Breeze as much as it pains me to admit it I do agree with alot of what you say. Also it is not just the government backstopping the mortgage industry, what happens to the 3M jobs that will be created when the government stops the spigot on that? That could also really be a nice second wave of unemployment couldn’t it?

Okay so I dont want to sidetrack and I sure don’t want to get into a political discussion with the Breeze.

Anyways, the pessimist in me is always strong. Very strong. I cannot help but to imagine tough times for the next 2 years with high unemployment. I try to envision the economic future, especially with regards to housing and it keeps coming out with either 1 of 2 scenarios. The first choice is a Japan like situation of the 90’s. That is characterized by a continuation of the secular cycle we are in and then a flat line situation with very little appreciation for a few more years after. A second scenario is a market that is more volatile. It continues down in a secular manner but has smaller rallies in it where each rally is induced by some artificial stimuli provided by the government. In both cases I think we see large skews in markets based on desireability and quality of home.

What confounds me is the inflation cycle. At some point when the economy does start to pick up, I just fail to see how we stave off interest rate explosiveness. This to me could be the catalyst to whipsaw housing right as it is starting to recover. How could it not do that right? Those who have ALOT of cash will be in the catbirds seat. However even in that scenario, if you think home prices will plummet in a manner of weeks or months you are wrong. They will chunk down but it will take another year or two or more. It will depend on our politburo, I mean government or whatever entity runs the country at that time.

We have touched on this a few times. In the face of an inflation tsunami is it better to have a 4 or 5% mortgage with a home ownership lifestyle? I don’t know.

All in all I don’t subscribe to the You have to be an idiot to buy theory. However in no way does that invalidate all of the arguments put forth. In short I AGREE WITH THEM. By the same token we have seen some people who have bought that are not idiots, at least not in my book. They have posted here and some of them continue to post here. All in all none of them seemed to indicate that they bought because they thought the market was going to make a quick recovery. The common theme in thier reasoning seemed to be lifestyle driven.

Breeze don’t take this as a cheerleading post to buy because it is not. I haven’t made any other offers to buy since the one I made last July. Mostly because I haven’t found anything I like but also because of a possible transition out of state as I see the erosion of California having a larger impact then I thought it would on my family.

All I know is that it is a tough choice for buyers and a personal choice for buyers. Lots of different factors. For me it has been to hold off.

[SD Realtor]

I am in between… Breeze as much as it pains me to admit it I do agree with alot of what you say. Also it is not just the government backstopping the mortgage industry, what happens to the 3M jobs that will be created when the government stops the spigot on that? That could also really be a nice second wave of unemployment couldn’t it?

Okay so I dont want to sidetrack and I sure don’t want to get into a political discussion with the Breeze.

Anyways, the pessimist in me is always strong. Very strong. I cannot help but to imagine tough times for the next 2 years with high unemployment. I try to envision the economic future, especially with regards to housing and it keeps coming out with either 1 of 2 scenarios. The first choice is a Japan like situation of the 90’s. That is characterized by a continuation of the secular cycle we are in and then a flat line situation with very little appreciation for a few more years after. A second scenario is a market that is more volatile. It continues down in a secular manner but has smaller rallies in it where each rally is induced by some artificial stimuli provided by the government. In both cases I think we see large skews in markets based on desireability and quality of home.

What confounds me is the inflation cycle. At some point when the economy does start to pick up, I just fail to see how we stave off interest rate explosiveness. This to me could be the catalyst to whipsaw housing right as it is starting to recover. How could it not do that right? Those who have ALOT of cash will be in the catbirds seat. However even in that scenario, if you think home prices will plummet in a manner of weeks or months you are wrong. They will chunk down but it will take another year or two or more. It will depend on our politburo, I mean government or whatever entity runs the country at that time.

We have touched on this a few times. In the face of an inflation tsunami is it better to have a 4 or 5% mortgage with a home ownership lifestyle? I don’t know.

All in all I don’t subscribe to the You have to be an idiot to buy theory. However in no way does that invalidate all of the arguments put forth. In short I AGREE WITH THEM. By the same token we have seen some people who have bought that are not idiots, at least not in my book. They have posted here and some of them continue to post here. All in all none of them seemed to indicate that they bought because they thought the market was going to make a quick recovery. The common theme in thier reasoning seemed to be lifestyle driven.

Breeze don’t take this as a cheerleading post to buy because it is not. I haven’t made any other offers to buy since the one I made last July. Mostly because I haven’t found anything I like but also because of a possible transition out of state as I see the erosion of California having a larger impact then I thought it would on my family.

All I know is that it is a tough choice for buyers and a personal choice for buyers. Lots of different factors. For me it has been to hold off.

[SD Realtor]

I am in between… Breeze as much as it pains me to admit it I do agree with alot of what you say. Also it is not just the government backstopping the mortgage industry, what happens to the 3M jobs that will be created when the government stops the spigot on that? That could also really be a nice second wave of unemployment couldn’t it?

Okay so I dont want to sidetrack and I sure don’t want to get into a political discussion with the Breeze.

Anyways, the pessimist in me is always strong. Very strong. I cannot help but to imagine tough times for the next 2 years with high unemployment. I try to envision the economic future, especially with regards to housing and it keeps coming out with either 1 of 2 scenarios. The first choice is a Japan like situation of the 90’s. That is characterized by a continuation of the secular cycle we are in and then a flat line situation with very little appreciation for a few more years after. A second scenario is a market that is more volatile. It continues down in a secular manner but has smaller rallies in it where each rally is induced by some artificial stimuli provided by the government. In both cases I think we see large skews in markets based on desireability and quality of home.

What confounds me is the inflation cycle. At some point when the economy does start to pick up, I just fail to see how we stave off interest rate explosiveness. This to me could be the catalyst to whipsaw housing right as it is starting to recover. How could it not do that right? Those who have ALOT of cash will be in the catbirds seat. However even in that scenario, if you think home prices will plummet in a manner of weeks or months you are wrong. They will chunk down but it will take another year or two or more. It will depend on our politburo, I mean government or whatever entity runs the country at that time.

We have touched on this a few times. In the face of an inflation tsunami is it better to have a 4 or 5% mortgage with a home ownership lifestyle? I don’t know.

All in all I don’t subscribe to the You have to be an idiot to buy theory. However in no way does that invalidate all of the arguments put forth. In short I AGREE WITH THEM. By the same token we have seen some people who have bought that are not idiots, at least not in my book. They have posted here and some of them continue to post here. All in all none of them seemed to indicate that they bought because they thought the market was going to make a quick recovery. The common theme in thier reasoning seemed to be lifestyle driven.

Breeze don’t take this as a cheerleading post to buy because it is not. I haven’t made any other offers to buy since the one I made last July. Mostly because I haven’t found anything I like but also because of a possible transition out of state as I see the erosion of California having a larger impact then I thought it would on my family.

All I know is that it is a tough choice for buyers and a personal choice for buyers. Lots of different factors. For me it has been to hold off.

[SD Realtor]

I am in between… Breeze as much as it pains me to admit it I do agree with alot of what you say. Also it is not just the government backstopping the mortgage industry, what happens to the 3M jobs that will be created when the government stops the spigot on that? That could also really be a nice second wave of unemployment couldn’t it?

Okay so I dont want to sidetrack and I sure don’t want to get into a political discussion with the Breeze.

Anyways, the pessimist in me is always strong. Very strong. I cannot help but to imagine tough times for the next 2 years with high unemployment. I try to envision the economic future, especially with regards to housing and it keeps coming out with either 1 of 2 scenarios. The first choice is a Japan like situation of the 90’s. That is characterized by a continuation of the secular cycle we are in and then a flat line situation with very little appreciation for a few more years after. A second scenario is a market that is more volatile. It continues down in a secular manner but has smaller rallies in it where each rally is induced by some artificial stimuli provided by the government. In both cases I think we see large skews in markets based on desireability and quality of home.

What confounds me is the inflation cycle. At some point when the economy does start to pick up, I just fail to see how we stave off interest rate explosiveness. This to me could be the catalyst to whipsaw housing right as it is starting to recover. How could it not do that right? Those who have ALOT of cash will be in the catbirds seat. However even in that scenario, if you think home prices will plummet in a manner of weeks or months you are wrong. They will chunk down but it will take another year or two or more. It will depend on our politburo, I mean government or whatever entity runs the country at that time.

We have touched on this a few times. In the face of an inflation tsunami is it better to have a 4 or 5% mortgage with a home ownership lifestyle? I don’t know.

All in all I don’t subscribe to the You have to be an idiot to buy theory. However in no way does that invalidate all of the arguments put forth. In short I AGREE WITH THEM. By the same token we have seen some people who have bought that are not idiots, at least not in my book. They have posted here and some of them continue to post here. All in all none of them seemed to indicate that they bought because they thought the market was going to make a quick recovery. The common theme in thier reasoning seemed to be lifestyle driven.

Breeze don’t take this as a cheerleading post to buy because it is not. I haven’t made any other offers to buy since the one I made last July. Mostly because I haven’t found anything I like but also because of a possible transition out of state as I see the erosion of California having a larger impact then I thought it would on my family.

All I know is that it is a tough choice for buyers and a personal choice for buyers. Lots of different factors. For me it has been to hold off.

[Author]

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