In todays slow housing market, what considerations when buying?

[brian_2]

"IF YOU CAN AFFORD IT"

No I didn't miss that. I agree in principle, but unscrupulous lenders have led hopeful buyers down the garden path too often. These defaulting buyers own the blame along with (some) lenders who never had their best interests in mind when qualifying them. The sub-prime home loan debacle is throwing up sparks now and we'll all pay for it.

[Need_affordable_home]

Originally Posted by Bhaalspawn

Would you consider living in a manufactured (mobile) home or do you insist upon a stick-built home? One problem with mobile homes is that you end up paying site rent, so you still do rent unless you've purchased a plot of land and set your home down on it (but if you do that, you've probably exceeded $50,000). If you don't mind paying a couple hundred a month for site rent, you coud probably find a nice used doublewide in the $25,000-50,000 price range.

Can get a mobile home almost anywhere on its own land for $50k. For the same price this will get me a real house in some states. Lot rent is not a good price unless its in a desirable location where houses cost $200k plus then huge savings, even cheaper than apartment renting, like half the cost.

Still its best to buy the cheapest house that strikes your fancy. If you like a house that costs $200k and another house that costs $125k, get the $125k house!

[marysally]

Originally Posted by brian_2

"IF YOU CAN AFFORD IT"

No I didn't miss that. I agree in principle, but unscrupulous lenders have led hopeful buyers down the garden path too often. These defaulting buyers own the blame along with (some) lenders who never had their best interests in mind when qualifying them. The sub-prime home loan debacle is throwing up sparks now and we'll all pay for it.

You still seem to be missing the point-- "If you can afford it" means that you can afford it, not that someone told you that you can afford it. I think most people are smart enough to know what they can comfortable afford and if they delude themselves into thinking they can somehow make it work, then they have only themselves to blame. I realize that there are a lot of delusional people out there, but they were not the people I was speaking of when I said "If you can afford it".

[marysally]

Originally Posted by Need_affordable_home

Can get a mobile home almost anywhere on its own land for $50k. For the same price this will get me a real house in some states. Lot rent is not a good price unless its in a desirable location where houses cost $200k plus then huge savings, even cheaper than apartment renting, like half the cost.

Still its best to buy the cheapest house that strikes your fancy. If you like a house that costs $200k and another house that costs $125k, get the $125k house!

Assuming that the $200K and $125K house are in the same neighborhood, you are absolutely correct. You should buy the least expensive house in a neighborhood and let the more expensive houses bring the value of your property up. If they aren't in the same neighborhood, the call becomes a little more difficult. Remember location, location, location.

[Need_affordable_home]

Originally Posted by marysally

Assuming that the $200K and $125K house are in the same neighborhood, you are absolutely correct. You should buy the least expensive house in a neighborhood and let the more expensive houses bring the value of your property up. If they aren't in the same neighborhood, the call becomes a little more difficult. Remember location, location, location.

If both neighboorhoods are good and in the location you want and the cheaper house is still nice and big enough, go for the cheaper one. You are correct that the cheaper house has a better chance of appreciation because its more affordable to begin with and also if the lots are all equal, the land value should be nearly identical anyway and appreciate equally.

[Dd714]

Most of the people here get it, some don't. A house purchase is not an investment, it is an appreciating asset (usually) and that makes it better than renting (usually).
But appreciation when you are comparing apples to apples - who cares? You have a house that appreciated 300%, so you think you are rich? No, you sell that and buy your next house that has also appreciated 300%. I guess you can sell your house and then live in a tent, but most don't do that.
Appreciation benifits NO ONE but speculators and real estate agents. For us normal people it just means we pay higher property taxes.

...buy the cheapest house you are comfortable in, in a neighborhood you are comfortable in, in a real estate market that at least is not collapsing.

[Need_affordable_home]

many people downsize or relocate and the equity in their house means they have money left over to save towards their retirement

[house-hunter]

well, I totally agree with NAH... most of us don't even know what we are getting into when we take these crazy high loans because we figure hey homes just appreciate 20% last year... guess what? its over and for all of those out there who defaulted on your home or are about to. Bad for you! great for me. I stood patiently on the sideline ready to purchase a home for over two years now but did not. i refused to pay that much for a home. Its insane out there. For all of you stupid buyers out there who got themselves over thier heads and signed on an ARM or other teaser loan all I have to say is that I'm glad that there are stupid people out there otherwise the market would go sideways and never go up and then down... No one is gona cry for you but I for one will be right there to crack a smile

[house-hunter]

oh, unfortunately whee I am the homes cost way more than 25k or 50k and I cant just get up and move.

[Bhaalspawn]

Originally Posted by ozradio

I've heard that in London people take out 50 year mortgages because real estate is so expensive. Will it come to that in the States?

Our nation is experiencing a huge population explosion (32.7 million added in the ten years between 1990 and 2000 according to the Census Bureau) and "they don't make land anymore" so housing prices near big cities could end up that way.

However, there's still plenty of room for smaller cities to grow and many people will decide that the outrageous expenses associated with larger cities just aren't worth it.

It should be noted that after the price of gasoline goes through the roof that long distance commutes will become more expensive, decreasing the benefit of outskirts/boondocks living and pushing people back into the crowded cities. (Let's just hope that high gas mileage two-seaters come to the U.S. market.)