Deleted
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Post by Deleted on May 4, 2011 23:44:47 GMT -5
Do you think the housing market will still be in a slum in the next two years? Depending on how everything works out with my job we might be in the market in 2 years or so. Is it wrong of me to hope it will still be? Am I a bad person?
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Mad Dawg Wiccan
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Post by Mad Dawg Wiccan on May 4, 2011 23:53:37 GMT -5
Yes, I believe it will be in the crapper two years from now. As a potential buyer, no you're not a bad person for hoping so.
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Deleted
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Post by Deleted on May 5, 2011 1:50:11 GMT -5
It will depend on the market you're in. Some markets never went through the bubble so therefore didn't go through the bursting. Some areas like Phoenix and NV overbuilt so much it will be years before they recover. I'm seeing some price increases in the metro San Diego area so I think it has probably hit bottom and is starting to recover.
But like stocks, it's really hard to time the bottom of the market and I'm not convinced you really need to. You need to buy on your schedule. What you've witnessed over the last couple of years will affect how you buy real estate for the rest of your life. My advice would be to buy something with an eye that at some point you might need to turn it into a rental. Even if you don't plan on being a LL it could be a good plan B if you wind up getting a great job offer across the country and can't/won't sell at the time.
That line of thinking has worked well for us. Phil can come on and spell out why over the long term saving 10% on the salesprice doesn't really matter; to me it works kind of like dollar cost averaging over 30 years.
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jd2005
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Post by jd2005 on May 5, 2011 8:13:44 GMT -5
My mom works in real estate and her company told her the Las Vegas market (where my primary house is) will recover, maybe, by 2032. This was one of the factors that lead me to the decision to begin the short sale process.
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Deleted
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Post by Deleted on May 5, 2011 8:15:09 GMT -5
It will depend on the market you're in. Some markets never went through the bubble so therefore didn't go through the bursting. Some areas like Phoenix and NV overbuilt so much it will be years before they recover. I'm seeing some price increases in the metro San Diego area so I think it has probably hit bottom and is starting to recover. I'm in San Diego and seeing the same thing. SFH in good areas are slightly up while Condos are lagging and flat or slightly down. To the OP, while housing may still be falling in your area, consider the current low interest rates. Calculate waiting out that additional 5-10% drop in property value versus a potential 1-2% increase in interest rates over a 30 year loan. Unless you are a cash customer, you should be evaluating both factors - not just house prices.
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Deleted
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Post by Deleted on May 5, 2011 8:15:33 GMT -5
Thanks everyone.... We are waiting 2 years to see how everything goes with work.
Also appreciate the tips bonnap because you are right, I might buy in 2 years and poof, something opens up and I might need to move.
For the next two years we are focusing on paying down debt and getting our act together. I am in the NY area but with work I might need to move to MA, CT, VT, PA, upstate NY, New Hampshire, etc.
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Deleted
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Post by Deleted on May 5, 2011 8:20:00 GMT -5
It will depend on the market you're in. Some markets never went through the bubble so therefore didn't go through the bursting. Some areas like Phoenix and NV overbuilt so much it will be years before they recover. I'm seeing some price increases in the metro San Diego area so I think it has probably hit bottom and is starting to recover. I'm in San Diego and seeing the same thing. SFH in good areas are slightly up while Condos are lagging and flat or slightly down. To the OP, while housing may still be falling in your area, consider the current low interest rates. Calculate waiting out that additional 5-10% drop in property value versus a potential 1-2% increase in interest rates over a 30 year loan. Unless you are a cash customer, you should be evaluating both factors - not just house prices. Actually house price is not even a factor , just a slight wish/hope. We would not be buying something we cannot afford. The 2 year plan is because of my job situation... I am still on projects and have yet to have a "home" location. So I just moved here last june and might need to move again next Feb or June. Nothing is set in stone, and we are using the 2 years as a timeline to get our act together. So around Jan 2013 god willing we will look at our job situations, income, expenses, savings and decide maybe if we can/should buy.
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Deleted
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Post by Deleted on May 5, 2011 10:15:38 GMT -5
Is it wrong of me to hope it will still be? Am I a bad person? Right or wrong is on your conscious and I don't need to judge you. I would say looking at the big picture, I don't want the US economy to stay in the dog house for 2 more years just to keep house prices down. Just think about how that might effect your employment picture.
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Gardening Grandma
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Post by Gardening Grandma on May 5, 2011 10:18:33 GMT -5
I firmly believe that one should buy (or sell) when it's the right time for them. Not when they think the market is up or down. If you buy a home when you are financially (and emotionally) ready, and it's in a good location and it's not too weird and you stay there long term, you will probably come out ahead.
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souldoubt
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Post by souldoubt on May 5, 2011 10:24:39 GMT -5
I live in SoCal where prices more than doubled in a five year span so despite the recent correction I still think homes are overpriced here and in the next few years they'll decline a bit more. I'm not in a position to buy right now but will be in about 12 months and have been watching condo/townhome prices for months now. There were places on the market 3-4 months ago that I liked and thought to myself "it's out of my price range" but in the last few weeks a lot of those have had the prices dropped 8-10%. I'm not expert but I'd imagine that if the asking price has been dropped that much that in most cases they've received smaller offers than those even or little to no interest based on the previous price. I agree that when you're ready to buy is what's important and don't try to time the market.
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Deleted
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Post by Deleted on May 5, 2011 10:32:20 GMT -5
I live in SoCal where prices more than doubled in a five year span so despite the recent correction I still think homes are overpriced here and in the next few years they'll decline a bit more. I'm not in a position to buy right now but will be in about 12 months and have been watching condo/townhome prices for months now. There were places on the market 3-4 months ago that I liked and thought to myself "it's out of my price range" but in the last few weeks a lot of those have had the prices dropped 8-10%. I'm not expert but I'd imagine that if the asking price has been dropped that much that in most cases they've received smaller offers than those even or little to no interest based on the previous price. I agree that when you're ready to buy is what's important and don't try to time the market. "Socal" is a big market. Plenty of land in Riverside County and down into Temecula and Fallbrook.. In those areas, prices have tanked and have farther to go. If you think about areas like New Port Beach or La Jolla, "they ain't making more land there" as my good friend used to say about Manhattan (I used to respond,"sure they are, it is just all vertical").. This is why it isn't just about looking at your local market, you have to look at the micro-markets.
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souldoubt
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Post by souldoubt on May 5, 2011 10:43:50 GMT -5
Yeah I know that I've been watching specific zip codes and areas for months now. Even in parts of Newport prices have been dropping. I'm not talking houses on the beach because those are out of my price range (by a lot) and summer life there is too hectic for my taste but there are some nice townhomes/condos that have been dropping in that area and surrounding areas. As far as the IE goes...pass. I'm not making that commute and I have 0 desire to live out there but there's no denying you can get a house out there at a great price right now. I know I'll spend more on a condo or townhome than what it would cost to get into some houses out in the IE but I'll gladly pay that price.
Edit - I'm content looking at the markets where I want to live. I've got no desire to try and gauge anything based on what happens 40+ miles away. Born and raised in OC and that's where I'd like to stay and I know if I want to live in certain cities I'll have to pay a bit more.
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Deleted
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Post by Deleted on May 5, 2011 16:25:04 GMT -5
My mom works in real estate and her company told her the Las Vegas market (where my primary house is) will recover, maybe, by 2032. This was one of the factors that lead me to the decision to begin the short sale process. So sorry to hear
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Deleted
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Post by Deleted on May 5, 2011 16:30:48 GMT -5
My mom works in real estate and her company told her the Las Vegas market (where my primary house is) will recover, maybe, by 2032. This was one of the factors that lead me to the decision to begin the short sale process. By recover, does that mean reach previous highs? That might be true, but a recovering market to me is one that has a steady increase in home values. That will happen within 5 years. Not everyone buys at the peak, so recovery to the purchase price for each home owner would be all over the map.
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tskeeter
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Post by tskeeter on May 5, 2011 18:34:32 GMT -5
My belief is that two years from now, home prices will still be pretty reasonable compared to the early 2000's. There will be some exceptions to to the general rule. Home prices may be moving up from rock bottom levels in most areas. But most homes will be a much better value than they were in 2005 and 2006.
Side note: did some quick number tumbling and figured out that, if our home appreciates in value 2.5% a year, it'll be back up to what we paid for it in only 25 years! Cawiau, I think you've got a long time before home prices truly "recover".
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sunuva
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Post by sunuva on May 6, 2011 9:13:28 GMT -5
As more and more people rent, there will be a strain on available rentals. The pendulum will swing such that the "Rental Market" is the place to be. Probably precipitating a "Rental Bubble" so to speak.
I don't believe it is so much of the rental market remaining stagnant and the housing market falling to meet it (equilibrium). But more of the rental market entering a bubble and rising to meet the housing market which may simply remain stagnant.
So when speaking of timelines for the housing market to recover, when the housing market is in equilibrium to the rental market (whatever that may be - just conceptually speaking, at the moment) that will probably be the determination of the housing market recovering. My belief is that the recovery will be sooner than "a long time" and probably 5 years at the outside. But that is based on my prediction that the rental market will go through a bubble - availability will diminish leading to increased pressure points leading to investment for more units leading to speculative investing/interest in the market for fast/easy cash leading to continuing increased pressure points. Rent controls won't be able to handle the onslaught of "fees" that will be levied as opposed to "rent" - if the history of what the financial institutions and telecommunications giants have been able to get away with are any indication of the future of "fees" as opposed to "controls."
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sunuva
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Post by sunuva on May 6, 2011 9:14:01 GMT -5
As more and more people rent, there will be a strain on available rentals. The pendulum will swing such that the "Rental Market" is the place to be. Probably precipitating a "Rental Bubble" so to speak.
I don't believe it is so much of the rental market remaining stagnant and the housing market falling to meet it (equilibrium). But more of the rental market entering a bubble and rising to meet the housing market which may simply remain stagnant.
So when speaking of timelines for the housing market to recover, when the housing market is in equilibrium to the rental market (whatever that may be - just conceptually speaking, at the moment) that will probably be the determination of the housing market recovering. My belief is that the recovery will be sooner than "a long time" and probably 5 years at the outside. But that is based on my prediction that the rental market will go through a bubble - availability will diminish leading to increased pressure points leading to investment for more units leading to speculative investing/interest in the market for fast/easy cash leading to continuing increased pressure points. Rent controls won't be able to handle the onslaught of "fees" that will be levied as opposed to "rent" - if the history of what the financial institutions and telecommunications giants have been able to get away with are any indication of the future of "fees" as opposed to "controls."
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Deleted
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Post by Deleted on May 6, 2011 9:31:32 GMT -5
Thanks everyone. We are moving to Poughkeepsie, NY to be closer to the shops, stores, night life, etc and also cut down on our rent.
But we have eyes on Fishkill and Kingston, NY in case we were to decide to buy. Fishkill because they have a good school district and Kingston (a bit further away, will make my wife commute about 45 minutes) because you get more for your money / more house, more land, etc.
Our budget is currently 250K (we were approved for 330 last January), and we would love to keep it around the same amount in 2 years. So if everything works out we will not need to increase the budget for the house.
We still have 2 years to see how everything works out.
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Deleted
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Post by Deleted on May 6, 2011 9:57:23 GMT -5
"rental market entering a bubble and rising to meet the housing market" I wouldn't really call it a bubble. Given that the US population is still growing there is a demand for more housing. With so much real estate tied up in the foreclosure process there are fewer available units to rent and builders aren't building. I posted about this phenom anon in a thread: If I go onto Zillow right now all of my properties will rent for more than someone putting 20% down and getting a fixed rate mortgage. This is the tipping point for most folks who have stable jobs. I posted my San Diego house for rent this past weekend (on Craig's List from Germany). I now have a new renter! This was not a cheap property at $2500/mth for rent. I've never rented the house so quickly. I probably should have rented it for a little more but I'm happy to get a military family with near 800 FICO scores in it for 2 years.
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Deleted
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Post by Deleted on May 6, 2011 10:06:10 GMT -5
I posted my San Diego house for rent this past weekend (on Craig's List from Germany). I now have a new renter! This was not a cheap property at $2500/mth for rent. I've never rented the house so quickly. I probably should have rented it for a little more but I'm happy to get a military family with near 800 FICO scores in it for 2 years. Nice.. but 2 years? So you do 2 years lease?
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cubefarmer
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Post by cubefarmer on May 6, 2011 20:14:17 GMT -5
It'll take 4 years at least to get through the foreclosures.
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Deleted
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Post by Deleted on May 7, 2011 1:12:28 GMT -5
"Nice.. but 2 years? So you do 2 years lease?"
Yes. I started doing the longer leases in 2008. I even have a 3 year lease with my tenants in the SF Bay Area. I seem to be getting some better quality tenants with the longer leases. I should have put some step increases for the 3 year lease because now it's about 20% below market vs my ideal of 10% below market. But at the time we were in the middle of our move to Germany and I was having a hard time renting out our AZ house. So I was grateful to have good long term tenants. By the time their lease is up they will have lived in that house longer than we did! We plan on moving to that house when that lease is up and our contract here is over.
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