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As for BlueSky's comment: Yes, my message is directed towards young people just starting out. All they hear is, "buy now for any price or you will be locked out forever" and "renting is throwing your money away."
But if you are moving to a bigger house then you would also do very well to wait 12 months. That way the money you will save on your new house exceeds the money you will loose on your current house.
Of course the best bet would be to sell your house now and buy your new house in a year or two. Rent for the time being, let someone else subsidize your living expenses.
As for the Clam, if you can find a truly nice house for $350,000 that doesn't seem too bad. Ive only seen crap-box houses in bad neighborhoods or far flung exurbs for that price.
Just curious; because based on all the facts, real estate is crashing right here on Long Island. Why buy a house when it is obviously going to be tens, if not hundreds of thousands cheaper in the next few years?
Look; I am really an optimistic person; but I cannot deny the obvious.
Take inventory for example; it is almost 3 times as high as it was back in 1999 and given the situation we are now in, inventories are obviously going to go much higher.
Moderator cut: personal website
Then there is the foreclosures; you can get the lastest numbers at Foreclosures Real Estate Foreclosure Listings and Homes at RealtyTrac
There are well over 12,000 houses right now in pre-foreclosure.
Many more that are at auction and yet more are bank owned.
Then there is the 2/28 and 3/27 ARM's that people used around 2005, 2006 at the height of the market at low teaser rates of anywhere from 1% - 4% that have been resetting; many have seen their mortgage payments double. This is the reason there are so many forclosures; people cannot afford to make the new payments; it doesn't have anything to do with jobs! Around October we will be hit with the brunt of the resets as you can see in the graphic below and this will continue for a couple of years; thus further increasing inventory.
At the same time the lenders are tightening their standards; they no longer write 100% loans; they want people to put down some money and I believe before this is all over, they will require 20% down like they used to. They are also getting rid of the 2/28 and 3/27 loans and are requiring full documentation; just imaging how many buyers will be taken out of this already buyer difficient market.
Moderator cut: personal website
The US economy is 70% consumer spending; on Long Island, that number is much higher. With all these loans resetting and people cutting back on their spending to try and stave off foreclosure; this will put a strong drag on our local economy. This will surely put us into a recession! When people lose their jobs; they cannot pay their mortgages and therefore, they will also lose their houses.
All this will certainly push prices lower; this is already happening right now! All the storm clouds are aligned! When people realize their house is worth so much less than their mortgage, they will walk away from it; it won't be the first time this happened!
A house can be rented out just like anything else and the rent will be cheaper. Just curious as to what people here who are thinking about buying a house justify their reasons to buy now instead of waiting the market out.
Thanks,
Long Island Bubble
location location location
stephen s
san diego, ca
When my wife and I bought our first home it was with $10k available as a down-payment and approximately $85k in annual income. Would I even be able to obtain a mortgage in todays market? And if I could get the loan how much would my payments be a month (this is all rhetorical, no math skills required)?
Clamboy, you've stated several times in this forum that people can now buy a starter home in a decent neighborhood with good schools for $350k. That starter home, with reasonable taxes (say $7k per year) is going to consume way more then 50% of the net income from a decent salary (let's use my $85k per year figure). Is that really considered affordable? And let's be honest, $350k still isn't buying anyone anything much beyond ownership.
Where would there be anything extra to invest?
Using your WWBD approach, he'd find a better region to gain entry into the real estate market, look for undervalued properties and buy them. You're not going to find anything like that on Long Island.
I once rented from someone on Long Island who had some very good ideas about real estate. His advice to me was to buy a two-family home and rent out one level and live on the other. Stay there until you've created enough equity or saved enough money to move yourself into a single-family home and then rent out both levels. Theoretically the two-family house will sustain itself. He'd bought several such properties and lived comfortably off the rental income. Buffett may not take that approach but for average folks I consider it solid advice even though it's ten years since it was first offered.
When my wife and I bought our first home it was with $10k available as a down-payment and approximately $85k in annual income. Would I even be able to obtain a mortgage in todays market? And if I could get the loan how much would my payments be a month (this is all rhetorical, no math skills required)?
Clamboy, you've stated several times in this forum that people can now buy a starter home in a decent neighborhood with good schools for $350k. That starter home, with reasonable taxes (say $7k per year) is going to consume way more then 50% of the net income from a decent salary (let's use my $85k per year figure). Is that really considered affordable? And let's be honest, $350k still isn't buying anyone anything much beyond ownership.
Where would there be anything extra to invest?
Using your WWBD approach, he'd find a better region to gain entry into the real estate market, look for undervalued properties and buy them. You're not going to find anything like that on Long Island.
I once rented from someone on Long Island who had some very good ideas about real estate. His advice to me was to buy a two-family home and rent out one level and live on the other. Stay there until you've created enough equity or saved enough money to move yourself into a single-family home and then rent out both levels. Theoretically the two-family house will sustain itself. He'd bought several such properties and lived comfortably off the rental income. Buffett may not take that approach but for average folks I consider it solid advice even though it's ten years since it was first offered.
As for BlueSky's comment: Yes, my message is directed towards young people just starting out. All they hear is, "buy now for any price or you will be locked out forever" and "renting is throwing your money away."
But if you are moving to a bigger house then you would also do very well to wait 12 months. That way the money you will save on your new house exceeds the money you will loose on your current house.
Of course the best bet would be to sell your house now and buy your new house in a year or two. Rent for the time being, let someone else subsidize your living expenses.
As for the Clam, if you can find a truly nice house for $350,000 that doesn't seem too bad. Ive only seen crap-box houses in bad neighborhoods or far flung exurbs for that price.
You are changeing your story as you are proven wrong , originally you said stony brook and smithtown and i gave you those and sayville, now you are in nassau next queens, maybe by time you hit manhatten you will be correct. I am not trying to prove you wrong for selling, you are trying very hard to justify what you did. You really dont have to, you made a good choice , just dont try to dissalusion other people into thinking it is as bad as Florida and california, because it is no where close.
P.S.
That seven year rule is a crock of sh*t.
On Long Island at least.
A lot of the homes are small or odd shaped or on odd shaped lots. Most homes are priced that way for a reason which cannot always be seen in a picture.
I think most married couples would want at least a 3 bedroom house, otherwise you may have trouble selling down the road. I know when I first was looking in 1995, these are what the agents were showing us. We finally purchased a 3 bedroom cape, but it had to be gutted. It paid off in the end as we did not have a problem selling since it was a "normal" house. It seems to me the definition of starter home has changed in 12 years. I know some here had said you have to sacrafice, but it shouldn't lead you to have issues later when you want to sell. And as others posted, many don't want to move in 5 years when they are ready to have kids. I know I didn't.
I did not believe the 7 year thing either - it took me 10 years. LI is probably an area where homes don't turn over quite that fast, but as the baby boomer generation ages and sells, that may change.
I don't think LI will see a down turn as bad as sections of FL, but it can happen, as it did in the past. Since every cycle is unique, the recovery time maybe shorter since other economic factors (right now) are not too bad.
A lot of the homes are small or odd shaped or on odd shaped lots. Most homes are priced that way for a reason which cannot always be seen in a picture.
I think most married couples would want at least a 3 bedroom house, otherwise you may have trouble selling down the road. I know when I first was looking in 1995, these are what the agents were showing us. We finally purchased a 3 bedroom cape, but it had to be gutted. It paid off in the end as we did not have a problem selling since it was a "normal" house. It seems to me the definition of starter home has changed in 12 years. I know some here had said you have to sacrafice, but it shouldn't lead you to have issues later when you want to sell. And as others posted, many don't want to move in 5 years when they are ready to have kids. I know I didn't.
I did not believe the 7 year thing either - it took me 10 years. LI is probably an area where homes don't turn over quite that fast, but as the baby boomer generation ages and sells, that may change.
I don't think LI will see a down turn as bad as sections of FL, but it can happen, as it did in the past. Since every cycle is unique, the recovery time maybe shorter since other economic factors (right now) are not too bad.
All three of those houses are fine and 3 bed at min.
Nay nay nay.
Truth of the matter is that LI Sub 400k is here to stay.
(Our taxes and interest rates have secured it)
Im listed at 339k on 100x100 3 bed 2 ba on a Dead End with a waterview.
(Similar to the Miller Place ranch about 2100sqft wth Finised Bsmt....A virtual estate by West Nassau/Queens standards)
Previous owner raised 3 kids in this house, dont underestimate the efficiency of the splanch, HiRanch or Inline ranch : )
East Seatauket is a 2 hour commute each way to the city. That is completely unacceptable! If you are a professional working in the city, you are working 9am to 7pm just to afford a plain Jane house out in the sticks. When you add in the commute you are away from from 7am to 9pm. And for what, to buy a house that sold for $45,000 a few years ago?
Come on, if you are a busy professional commuting from the city, you really can't get much further out than the Hicksville station of the LIRR. If you want a house in a decent school district, you are looking at Great Neck, Roslyn, Plainview/OBP, Syosset, Woodbury, Jericho, etc. And to get yourself in an ok starter house there, you are looking at $600,000 easy.
Sure you could save some money if you live in Port Jefferson, but if you are to have any quality of life at all, you have to work out east as well, and it can be quite difficult to make the requisite $140,000 annual household income to safely afford a $350,000 house if your are working in Port Jeff.
East Seatauket is a 2 hour commute each way to the city. That is completely unacceptable! If you are a professional working in the city, you are working 9am to 7pm just to afford a plain Jane house out in the sticks. When you add in the commute you are away from from 7am to 9pm. And for what, to buy a house that sold for $45,000 a few years ago?
Come on, if you are a busy professional commuting from the city, you really can't get much further out than the Hicksville station of the LIRR. If you want a house in a decent school district, you are looking at Great Neck, Roslyn, Plainview/OBP, Syosset, Woodbury, Jericho, etc. And to get yourself in an ok starter house there, you are looking at $600,000 easy.
Sure you could save some money if you live in Port Jefferson, but if you are to have any quality of life at all, you have to work out east as well, and it can be quite difficult to make the requisite $140,000 annual household income to safely afford a $350,000 house if your are working in Port Jeff.
Do you see my point?
Babylon 60 min.
Ronkonkoma 75 min
Smithtown 75 Min.
Be Bold
Think Thinker Think.
How do you think these towns were built Thinker If theres a stop,...theres a commuter.
Do you think people are taking the LIRR from Port Jeff to Kings Park for daytrips and to sight see.
As for 45k in E Setauket a few yers ago ...please put down the pipe.
People must like what they came home to since there are many commuters who live there ...plus the schools are very good in 3v.
Think
C
PS
If your thinking Great Neck...you better brush up on your Farsi.
When my wife and I bought our first home it was with $10k available as a down-payment and approximately $85k in annual income. Would I even be able to obtain a mortgage in todays market? And if I could get the loan how much would my payments be a month (this is all rhetorical, no math skills required)?
Clamboy, you've stated several times in this forum that people can now buy a starter home in a decent neighborhood with good schools for $350k. That starter home, with reasonable taxes (say $7k per year) is going to consume way more then 50% of the net income from a decent salary (let's use my $85k per year figure). Is that really considered affordable? And let's be honest, $350k still isn't buying anyone anything much beyond ownership.
Where would there be anything extra to invest?
Using your WWBD approach, he'd find a better region to gain entry into the real estate market, look for undervalued properties and buy them. You're not going to find anything like that on Long Island.
I once rented from someone on Long Island who had some very good ideas about real estate. His advice to me was to buy a two-family home and rent out one level and live on the other. Stay there until you've created enough equity or saved enough money to move yourself into a single-family home and then rent out both levels. Theoretically the two-family house will sustain itself. He'd bought several such properties and lived comfortably off the rental income. Buffett may not take that approach but for average folks I consider it solid advice even though it's ten years since it was first offered.
Buffet lives in Omaha....I bet if he lived here, he'd buy and hold before renting.
I know he wouldnt be a lemming and buy hype elsewhere.(He did pass on the .coms)
I disagree with you on value plays here ...theres plenty of undervalued LI left.
(You gotta dig deep and do your DD)
Let it go Tarhell...youre a country boy now.
You sound homesick pal.
Are the posts there that boring?
: )
C
Last edited by clamboy; 09-04-2007 at 02:00 PM..
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