patrick.net

after horrible new england winter went down to florida to check out the market. Total impulse purchase and closing soon. Will use it as a vacation/winter home for the next few years.

Bought a 4/3 townhouse 1/2 mile from the beach with rooftop deck that has panoramic view of the ocean. Place is 10 years old and in good shape. Can still walk my kids to school (1 block). Paid $799,000 and mortgage is $3,382; $/sq foot is $379. Neighboring properties sold for $880K (two and not as nice) and one across the street is going for $1.1M. I was paying $3800 in rent so after tax deduction, insurance, and maintenance (I itemize a lot as a small business owner), Im about $300 less/month. This isnt including the money I collect off investments I didnt put down on the house (about $400) and money towards principal ($800/month). Typical rent for this place would be $3800-$4000.

I am in South Fl.Had the contract done with owner today.
Will go mortgage shopping starting Monday and closing in September.
This is a 2X 2 condo.May be it might still go down..but I liked the unit..its in the same wing where I rent now but on diff floor.corner unit.
Paying around the market price,HOA is the biggest expense @320 pm
Price is 62.5K for 1100 sft condo that is 32 year old

If prices aren't going up much in the summer, what are they going to do from September?

American in Japan says

If prices aren't going up much in the summer, what are they going to do from September?

If you are referring "they" to government then they are going to come up with more money to give away struggling irresponsible people. :)

I bought last year, I put in the offer in July when values were at certain level, the Real estate cheer leaders were calling the tax credit a success. The Offer went in on July 15, to close on Sept 1, by the time the bank appraised the place, the news did a 180 and the RE was gloom and doom again. By the time I was appraised it came in 10K under the asking price, which is what I got it for.
Had they appraised a week or even a few days earlier, the Appraisal would have came in 20K over and the bank would have been trying to get me to take out more money to cover move in repairs and getting the house in order.

When I bought, there were less than 25 houses that had sold in 2 to 3 years in my part of town. There's been well over a hundred since then.

I think houses moved this year, but I think it's because the prices have been coming down. If that changes, the sales will stop.

I am buying property and building a house in Plano TX. It is about 15 miles north of Dallas. I have been reading this group for years. I waited a few years to join, and rarely comment. I am interested in real estate, but not really for investment reasons. I own a 3,000 square foot house and will sell it to build the new one. I am getting a one time close loan that will be interest only until the build is done. Then, Once I occupy - I will lock in the rate (will not be more than 1% over today's rate) and will get a 10 year fixed that will turn into an ARM for the last 20 years. I do not want an ARM, but have had difficulty getting a loan for the last 2 years. I was in no rush, and have waited until everything meets my criteria. There is some risk, but being a contrarion in a bad market can be good in some cases.

I plan to try to flip to a 30 year fixed once construction is done. This will be easy unless interest rates sky rocket in the next 8 months. I think interest rates are going up, but no need to argue with me. All the graphs and charts give me a headache. I could be wrong, but I am willing to take that risk. Now that I could not lock to a fixed 30 year, I will be just fine if rates hold until the construction finishes.

The place is called Normandy estates in Plano. It is a nice neighborhood and was completed at the worst possible time. Nobody could get financing, so it currently sits at about 4% occupancy. But, the West side of Plano is built out, and this is prime location. It will be built out at some point, but it could be several more years. This is not a big deasl to me as the total neighborhood is relatively small with stable stuff all around.

Dallas - there were problems here, but nothing like other areas. Lots of foreclosures, but mostly because people got loans they could not afford. Dallas has everything people need, except there is no real NATURAL attractions and it is hot. Those are big deals, but it has kept housing reasonable. New housing can keep going north for a long time.

I am excited. I am not smart enough to debate some of the arguments on here, but I have never understood how everybody can seemingly ignore a major element of the statistical method. The USA has always been growing / prospering in general. Down periods, but huge upward trend. Predictions are great, but look outside of the last 200 years and you will find that once powers start to decline, the old graphs are no longer relevant. This is true with business, countries, sports teams, etc. The decisions made on a start up are vastly different than those made for a mature company. No graph / chart fills all possibilities.

I am thinking of buying a condo in areas which are not much affected in terms of jobs loss. But not sure if this is a right time or not.

Good luck. Nobody knows for sure. Research opinions on both sides in your area of the world, and then come to your own conclusion. There are too many variables to make perfect decisions, so just try to make a 'well thought out' one. I made a good profit selling my Apple stock, when I thought it reached a good profit level. Yesterday, I saw something to the effect that it went up 5,000% since. That makes me laugh. But, no regrets, because I thought it through and ended up being VERY wrong.

In my city you can find condo's for 40k now, houses still .. you know, they still want 50-100k for a home that needs to be gutted. Some of the price drops I've been seeing are desperate sellers worried that the market will dry up again when winter hits, and want to move the place. I am seeing better deals, but still all the investors are changing the face of RE. When these price drops come, my guess is that more underwater owners make that decision to walk away.

everything says

my guess is that more underwater owners make that decision to walk away.

More taxpayer $$ will flow to the banks to cushion their losses.

We are planning on putting in an offer for a house, but since it is much lower than the listing price I don't feel confident saying we're going to buy.
We have a mortgage broker and a real estate lawyer and my obsessive researching skills... and if the sellers decline I will obsessively research other properties. Since this is the first house that we have seen that we were willing to spend *any* money on, finding another could take some time. We are really really lucky that we mostly fit comfortably in our apartment and our landlady lets me plant things next to the driveway... I am nesting here quite well.
What made me start looking harder was that 6 months ago houses that didn't suck were starting to be sold for amounts that didn't make me weep. More recently, a local friend had to get a new apartment and discovered rents had gone up a lot while we were busy having babies. We haven't had a rent hike in 2 or 3 years, so I expect it's only a matter of the next water bill before the landlady knocks on the door and shrugs apologetically and there goes half of the next pay raise.
At the price we would like to pay, the mortgage/taxes/etc would increase our monthly outlay by about 20%. However, we would get three times the space and (unless inspection says otherwise) it's a legal two family-- so if we had to rent out rooms or even a whole floor that would bring our expenses to well under neighborhood rents.
Caveat: we live in New York City, which has a thriving rent culture. Our third year here, our landlady thought it was terrific that we were subletting our second bedroom and only asked that we give her a little extra for the hot water our friend would consume. Meanwhile she and her adult son and daughter and her daughter's twin girls were living upstairs in her three bedroom apartment ...
...which is to say: Any house we buy has to have flexibility built into it. There needs to be room for my sister and a big dog and whatever life throws at us, or the debt is not worth it to me...
But maybe I'm being greedy, and I should stay renting month to month. Right now, my family is comfortable either way and it isn't clear if there is a wrong answer-- or a right one.
I thought being a grown up would make things more clear. grumble grumble.

Thanks for the stories so far...

these stories are helpful as we are considering a purchase in Austin, TX.

Anyone else? Summer is about over so the cyclical component is on your side if not the longer trend.

If it won't kill you, I'd rent and let Austin cool-off for at least a year or two -- literally and figuratively. Austin may be one of the better-looking glue horses in the US housing market, but don't believe the hype:

http://www.carvajalgroup.com/austin-real-estate-market/2011/03/06/california-new-york-make-a-bee-line-to-austin-tx/

Or do, and make some Austinite and his realtor wealthy. Every third person you meet here these days is, in some way, involved in real estate, and they refer to Californians as fish in the proverbial barrel.

The house below closed this month for nearly 100K more than it listed for initially in 2009 -- and that was in the midst of the tax credit free-for-all. Somebody got lucky...

http://www.zillow.com/homes/1001-Arcadia-Avenue-austin-tx_rb/

If you are referring "they" to government then they are going to come up with more money to give away struggling irresponsible people. :)

I'd say this was prescient of you all the way back in July - but then again, I guess this strategy is pretty old hat by now.

I recently got married I am looking to buy a house in the $1 million range in the Los Angeles area. In this price range in the areas I am looking at, houses seem to be going fairly quick, and homes seems to be getting multiple offers. I have also looked (with no intention or ability of buying) homes going up to $1.5 million, and these houses seem to be moving. Is it just that people with money and able to afford in this price range are still buying homes? Have homes in this price range not taken the same hit % wise as homes in lower price ranges?

beautybar1 says

Have homes in this price range not taken the same hit % wise as homes in lower price ranges?

Supply/demand. People making the big money in LA generally have to live convenient to their work. They could hire a car service and commute but that's still lost time, and when you're making $100,000 a week, time is certainly money.

Prices down in Laguna Beach are far from sticky though. Eg:

http://www.redfin.com/CA/Laguna-Beach/31551-Toto-Loma-Ln-92651/home/3264197

Aug 16, 2011 Price Changed $999,000 -- SoCalMLS #L35759
Jul 08, 2011 Price Changed $1,199,999 -- SoCalMLS #L35759
May 04, 2011 Price Changed $1,250,000 -- SoCalMLS #L35759
Apr 15, 2011 Listed (Active) $1,300,000

The area I am looking at has a good school district so it makes it very appealing to families. I guess what I am trying to figure out is how much the location is really in a bubble. I do think it is overpriced, though people are still buying. With all of the analysis about median income not supporting home prices, prices are still up there. Perhaps like you said the demand is high and supply is finite so prices will continue to stay high regardless of what is taking place in the economy?

Bought and happy. I personally believe massive inflation is coming and so it now makes sense to fix as many expenses as I can.

Debt slave I am not, I can buy this house now in cash if I wanted to. But since loan rates are now lower than the rate of inflation, why not?

Also... moved away from California to the quiet and inexpensive midwest. If I still lived in CA, I would not buy. I would leave.

Forgot to say, that in this area in the midwest the rents are actually higher than the mortgages. Like a normal economy.

Mutex says

I personally believe massive inflation

wage inflation or price inflation?

Why should wage inflation appear when underemployment is 16%?

Now, farm-centric areas might in fact see further wage inflation as commodity profits bleed out into the wider economy.

Buy foreclosures. Some are for sale at 10% of the debt they foreclosed on. 50% is more common. YMMV

"wage inflation or price inflation?"

Price inflation ofcourse. In other words an inflationary depression.

http://www.ehow.com/about_6722921_inflationary-depression_.html

Is anyone planning on buying now that the "summer peak" has passed?

i was planning to but my down payment has been erased by the stock market.

Well seller accepted my offer after 3 weeks of going back and forth yesterday. Seller could have sold it at higher price but was in denial with 1 price reduction in 5 months and lost out on the summer season. Seller ended up selling to me for $97k less than their initial asking price.

Why did I buy a house? Sold the house 3 months ago and sick of living in corporate relo apt, Residence Inn and now short term furnished house. Family wanted to settle down as all of our stuff is in storage. Besides relo paid to sell my house and is paying all closing cost on new house including up to 2 pts. Also got decent six figure package consisting of cost of living monthly payouts and zero % interest loan. Otherwise we wouldn't have bought.

I don't know if I'd call it "Planning to" but I'm sitting on 80K in my bank waiting until the right time. I'm very torn. I want to buy, want to settle down, want to be able to technology up my house and get a home theater system going and put up actual decorations. But I like my 2/1 apartment that is cheap and near the beach and I'd hate to buy and have prices drop another 20% given that I'm looking at 250K houses.

My hope is that post-summer in Dec/Jan the people who really have to sell drop a good bit more. In the little neighborhood I'd really like to buy in there's currently 3 houses for sale and 1 short sale, but no war has started to see who gets to the bottom first.

My company also just did a round of layoffs, I'm not worried and think I have a super secure job, but it feels way better having 3 years worth of living expenses in the bank versus having no money in the bank and 2K due every month.

robertoaribas, just wondering, how do you handle the maintenance, upkeep, paperwork of what I assume are at least 4 rental properties?

Decades ago my folks had 3 small rental homes in SE Michigan that we let to automobile company relos. It was a huge amount of time to keep it all going. After my brother and I left the state for college, and my mother died, my father just couldn't manage it. He had to sell. There was no way to keep his job and handle all this stuff, much of which didn't seem economically or reasonably delegable to others.

badmigraine says

robertoaribas, just wondering, how do you handle the maintenance, upkeep, paperwork of what I assume are at least 4 rental properties?

Decades ago my folks had 3 small rental homes in SE Michigan that we let to automobile company relos. It was a huge amount of time to keep it all going. After my brother and I left the state for college, and my mother died, my father just couldn't manage it. He had to sell. There was no way to keep his job and handle all this stuff, much of which didn't seem economically or reasonably delegable to others.

Perhaps he hasn't owned them long enough to know what the maintenance issues are going to be. I too grew up with parents who owned rentals. Two to be exact. Both were smaller houses that had been more recently renovated. The experience made me decide that I will never buy rental property. Its a royal pain in the ass. Every single time renters moved out, even if they were squeaky-clean the whole interior needed to be painted. Think about it- people scuff up the walls, touch paneling, and so on. What looks like a perfect house with people living in it soon turns into a grubby looking house as soon as they move out. Carpets and flooring wear out. Plumbing and electrical needs repairs as does everything else.

I'm going to probably buy in 1st Quarter 2012. I don't know if that's going to be closer to the bottom but I'm going to anyway.

I am set to close in early November. We do not plan on selling it in our lifetime. We can afford it on one income. We've saved 20%. We like the schools. We like the neighborhood. We like the house.

I'm happy dammit.

Don't worry ... be happy!

jessica says

I am set to close in early November. We do not plan on selling it in our lifetime. We can afford it on one income. We've saved 20%. We like the schools. We like the neighborhood. We like the house.

I'm happy dammit.

Pre purchase post purchase rationalization?

dodgerfanjohn says

jessica says

I am set to close in early November. We do not plan on selling it in our lifetime. We can afford it on one income. We've saved 20%. We like the schools. We like the neighborhood. We like the house.

I'm happy dammit.

Pre purchase post purchase rationalization?

Pretty much!! I know enough to be totally scared.

I want to buy but I'm fearful. However, rents in MA make buying very desirable.

I want to buy to have a "home" for my son to grow up in. We have been renting his entire life (he's 8) and I have owned homes in the past before he was born.

However, the home would be purchased on my income alone (hubs is sporadic) and the fear of losing my job b/c of the economy is justified.

I want to move in a town with a commuter train that could bring me into Boston for other job opportunities - but then I'm looking at higher home prices, etc.

Plus we have pets, so renting would be very difficult, if not impossible for us to do and I love them like family so I couldn't just "get rid" of them because I want to move. Right now we rent from MIL - so she allows the pets.

My head spins daily on this dilemma.

I've finally recovered financially from a divorce (done with alimony, and in 8 months I'll be done with child support). I've owned multiple homes in the past (and I mean owned, no mortgage), and owned rental properties (duplexes - also no mortgage). That said, you never really "own a home". At least not in the U.S. My last home that I "owned" still had an $8,500 a year property tax bill, water bill, maintenance cost etc. I'm amazed at the folks on here who underestimate what maintenance costs on a house really comes out to - they've never had to replace a septic system, or a roof, of have tree's removed, or replace a 700 foot driveway, or pay to have a house painted, upgrade/replace windows, deal with termites... you get the idea).
That said, I'll buy a single family again. I like the privacy of at least 5 acres around me and I like being on water. Donald Trump says it's a great time to buy a single family house. He's right, but he also adds the important caveat, buy, but only buy a bank foreclosure, after you've low balled them on the offer.
When you look at house prices, forget about monthly mortgage payments, think about how long you'd have to work to save up the money to pay cash for the whole thing. I only manage to save about $30,000 a year (back up to 50k after CS stops). That means a 300k home is six years of labor. That's a long time, but put's me back on the side of the fence for buying.

Anyone else planning to buy before year's end?

American in Japan says

Anyone else planning to buy before year's end?

I'm looking at 2016 or so.

http://www.reuters.com/article/2011/11/03/us-economy-california-budget-gap-idUSTRE7A28L520111103

California's got tons o' problems still. $600 per person state shortfall that's got to be closed.

$11B owed on unemployment:

http://articles.latimes.com/2011/oct/25/business/la-fi-california-unemployment-fund-20111025

I don't see how California is going to turn things around at all.

But Fukushima-I really did a number on my retirement plans. Tokyo might still work, I don't think the Cesium release is a present health threat, but who the hell knows.

Bellingham Bill says

But Fukushima-I really did a number on my retirement plans. Tokyo might still work, I don't think the Cesium release is a present health threat, but who the hell knows.

Sorry -- what did you mean by this? You wanted to retire in Japan?