Should I buy or wait??????? (Lancaster: foreclosed, rent, loans)

[skypilotd1]

We are looking to buy our first house in Lancaster CA, we are in the positon where we could wait. The house we found would take half of our monthly income. Would it be wise to buy now or wait? If we should wait, how long? If we did make an offer, how much lower should we go off the asking price? (it's a foreclosed home that we're looking at). We would be getting a 30 yr fixed VA loan when we buy. Any advice would be so helpful, thanks!

[desertdawgx]

I sold 3 properties over the last few years in Lancaster and am waiting to buy back in.Homes are going down 5 to 10 thousand a month,forclosures are accelerating over the next 18 months.If you can wait till end of 09 you will get homes for 30 to 50% off of todays prices and I am seeing some already down 30%.What is your budget and how big of ahouse do you want?

[desertdawgx]

Also 50% of your income is a no no,no more than 25 to 30% unless you like to eat Top Ramen everyday.

[skypilotd1]

We bring home 4,000 a month + overtime. My husband just got out of the military and has been at his job now for 7 months. It's a law inforcement job so it's pretty secure. We currently have no debt other than rent.

Want at least 3 bedrooms and 1600+ sq ft.

So is the 25 to 30% off of gross or net? I don't like top Ramen...

Can we offer 30% off the asking price of the house now or should we just wait? I would really like a house now, but want to be wise...

[desertdawgx]

Prices are falling hard and they will be for the next few years,right now you could probably afford a 250k home comfortably.250k now gets you a 3 plus 2 1400 sq ft decent neighborhood.2 years from now it will get you 2500 sq ft pool big lot in the best neigborhood.You tell me which would you rather have?You can rent a nice home on the westside for well under 2000 a month and watch the market for your dreamhouse.The 250k house today will be worth 150k in a couple of years,do you want to lose one the biggest investment of your life? I am waiting and the soonest I intend to buy is fall of 08 and only if the deal of a lifetime comes by.I have been investing out there since the 80s and will pay cash for a home.Be patient and you will be richly rewarded.

[CLQ]

Wait until next year when more loans reset the interest rates. Prices will drop further especially in outskirts like Lancaster

[LALady]

Originally Posted by desertdawgx

Also 50% of your income is a no no,no more than 25 to 30% unless you like to eat Top Ramen everyday.

ha ha! Top Ramen rules!

[desertdawgx]

I read today that 1500 homes are in forclosure in the AV right now and 6000 more are expected in the next 6 to 8 months.Sales are off 70% from last year.Currently there is 2 years of inventory and when the new forclosures hit the market we will have 4 or 5 years of inventory.In the first half of the year 2500 people have been issued notices of default which is just prior to being a forclosure.Looking at the data I would say wait a bit.

[skypilotd1]

Thank You!

[Axiom]

Originally Posted by skypilotd1

So is the 25 to 30% off of gross or net? I don't like top Ramen...

Most of the "Rule of Thumb" calculations are based on gross income.

25% - 28% is the range for housing.

33% - 36% for all debt

I think conventional, conservative financial wisdom is that households who spend over 30% of their gross income on housing could have an affordability problem.

Personally we've never been able to keep our housing numbers down in the 20's, we're always up in the 30's somewhere; but we also rarely carry any debt other than housing, so we've been comfortable fudging up some. I would never go as high as 50% though!

Of course plenty of folks have been making up their own affordability rules in recent years, especially in high priced RE markets like much of CA, and these new, innovative 'rules' have nothing whatsoever to do with ANY kind of wisdom IMHO.

I hope you find just what you're looking for, and at a price you can afford.