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they do but you should not expect more then 3-8% a year. Bubbles take much longer to deflate than inflate. In Japan prices are still going down 20 years after their real estate bubble. But I agree if you are set to buy a 3% percent a year is frustrating. As others mentioned sellers will do anything to keep the prices up and the fed is helping them. Rent and think of the advantages: no taxes, no maintenance, no depreciation, etc.
And no you not deserve what you can afford because what you can afford is a result of an economic policy of others.
Yes, it is all external forces acting against you. Someone else has your fate in their hands. There is absolutely nothing one can do to overcome this. It is a hopeless cause. Yes, how much you can afford has nothing to do with hard work, intelligence and ingenuity.
Hard to believe with that kind of $ I would expect the moon. I'm still spoiled from the 1980's when you could buy several acres and a house in nice parts of NJ for less than $100K. I know, that's history, still.
I feel like this could happen again. They buyer just needs to be open minded to whats "nice" these days. I feel like its time to move away from the metro area in NJ. I am thinking about buying in Warren county and just eating the 55 minute commute to Hackensack (or at least my boyfriend will have to ) to get the hell out of this over crowded place.
Not to mention: TAXES. My aunt's mother in law lives in Milburn, on a relatively small lot, and her taxes are 12k a year. NO THANKS.
you shouldn't assume an up market. when buying a house, you should be assuming pessimistic outlooks, not optimistic outlooks.
-how would i afford the payment if i lost my job?
-what would i do if i needed to sell and the value went down.
etc.
let's use your scenario...if i bought a house in 06 that cost $360,000 with 20% down, i'd be starting at $288,000, not $300,000. also, i would have refinanced it in 2009 or 2010 @ around 4.5%. i have a few neighbors that have done this.
where are you getting the $40k to the table if you have to sell? sorry my brain is fried. also...i don't know that my house won't drop another 20%. but i don't care. i think we've established that already though. i can afford my payment and extra. the extra sometimes i pay, sometimes i add to my emergency fund. i'm set up comfortably in my mortgage situation, because i didn't make assumptions so optimistically like people did from 04-06.
unless you bought towards the end of 2006, you didn't lose 50% unless you lived in vegas or florida or parts of california.
i find it funny that you state people should purchase a house with the thought that the value should drop or remain stagnant, but in the same breath (ok, another post) you said "dunno that I would be assuming a 30% drop". Why is what *you* think about potential housing decline sound and reasonable, but people who actually have been through a 30% drop are those who "didn't plan properly"? You kill me dude!
You come across as the classic "the housing price freefall stopped the minute I closed on my house"!!!
You totally should have been like me - bought 12 years ago at the bottom of the last crash (which, BTW caused housing to be flat for 8+ YEARS), 20% down, no crazy ARMs or HELOCS - sitting on 60+% equity. You simply didn't plan right. How obnoxious does that sound?
i find it funny that you state people should purchase a house with the thought that the value should drop or remain stagnant, but in the same breath (ok, another post) you said "dunno that I would be assuming a 30% drop". Why is what *you* think about potential housing decline sound and reasonable, but people who actually have been through a 30% drop are those who "didn't plan properly"? You kill me dude!
You come across as the classic "the housing price freefall stopped the minute I closed on my house"!!!
You totally should have been like me - bought 12 years ago at the bottom of the last crash (which, BTW caused housing to be flat for 8+ YEARS), 20% down, no crazy ARMs or HELOCS - sitting on 60+% equity. You simply didn't plan right. How obnoxious does that sound?
1. yes, when you purchase a house, you should not assume that it will always appreciate, especially in the short term (<10 years). real estate, on average, appreciates 3-5% annually if you look at historical rolling periods of time.
2. a completely separate conversation from how i would financially approach buying a house and down payment i should have and emergency fund i should have....i do not personally believe that the NJ real estate market still has 30% more to drop. not given what's happened over the past 3-4 years. i look at numbers. for instance, a place i was just visiting this weekend in NJ, friend bought in 2009 for $349,000. it last sold before that in 2004 for $344,000. in fact, a lot of the houses i've looked up have a very similar outcome....prices today are pretty close to the price in 04. i'm not trying to sound like an oracle, but in 05 and 06, i had many conversations with friends about how younger people would not be able to buy a house, since they would never be able to afford a down payment. of course, sometimes the reaction was "do a 5/1 ARM" or "no money down loan". i'd love to see the statistics, but I would bet that a very small population of homeowners in trouble were ones that put 20% or more down when they purchased in that 05, 06, 07 period of time. of course, that's assuming they also didn't take out all that brand new equity they had after they bought and it went up by 15% in 4 months. cause appreciation like that is completely normal.
3. my home purchase has nothing to do with what i think about what direction the general housing market is going. when i was house hunting in late 2009, I did not have any such confidence that prices wouldn't drop further. in fact, i would have been very happy to not have found the house i bought, because i had the attitude at that time that prices would likely keep coming down. the opposing force to that thinking was that interest rates were around 4.6, 4.7%....and of course "how could they get any lower". never would have thought i'd be refinancing my mortgage a mere 7 months after i closed on a house, to get a 3.875% 30 year fixed.
i'm not saying to buy now because housing prices can't fall any further. i'd advise a friend who asked to buy now if they can afford to, because prices have fallen from their peak quite a bit already, interest rates are still at record lows, and unless the economy gets even worse (which I don't personally feel the government will allow much more, to a great degree, as far as they can control), i don't believe the economy will get that much worse to make it unreasonable to purchase a house instead of renting a place.
i'm sorry if it sounds obnoxious, but if you're not financially in a place where you can weather a drop in equity, i don't believe you planned sufficiently. as i said before, there are always exceptions, but in general, i believe this to be true.
OP's price range might be out of reach for most of us but ...
NJ houses are overpriced, and the price range, she can afford, would buy a much better house ten years ago with much lower taxes. Why should she be satisfied with what is offered today? She is not in dire straits as she can still buy a house, but this house could have been bought for much less few years ago, and is still associated with a "lesser" status. She only asks for what she deserves.
Something similar happens at a lower price range. Many people who can afford a $600K house are priced out of neighborhoods that could buy into a few years ago just because of bubble pricing. Why would someone who can support a $600K house be forced to buy a house that will ordinarily cost $400K but because of the bubble economy costs now 600K? Aren't those people deserve a better location/neighborhood? Houses in NJ are still about 50% higher on average compare to 2000.
The problem is that she wasn't saying that what she can buy for 1.2 million now is far less than what she could buy for 1.2 million 10 years ago . . . anyway, that would still be a "Duh!" statement, one where it disheartens me that someone so unintelligent can actually afford a house for 1.2 million.
She was saying that she can't find a decent place with at most an hour-long commute, etc. for her budget. That makes her a moron, whether it's because she doesn't know the slightest thing about doing any research, or whether it's because she has ridiculously snobby criteria. Just a quick search on Zillow (which I know isn't at all authoritative, but it can give us a rough idea) for homes within the radius she needs, that are listed as "For Sale", with a minimum of 5 bedrooms (why she needs that many, who knows), a minimum of 3 bathrooms, a minimum of 3,000 square feet, with a cap of 1.2 million dollars returns over 1,000 listings, many of them beautiful homes on huge lots, not on main streets.
And if you cut the cap to, say, 900k instead, it cuts the listings by less than 20%, so the vast majority are under 900k--a full 25% less than their budget limit. You have to cut to upper limit to 700,000 to halve the results--while still keeping the minimum number of bedrooms at 5, bathrooms at 3, etc.
If you make the bedrooms and bathrooms a less ridiculous 3 and 2, but keep everything else the same, you're back up to over 1000 listings in that radius with a CAP of 700k. Someone can't find a decent house with over 1000 to choose from? And they could save almost half of their money. If you raise the cap to 1.2 million with those criteria, it's over 2,000 properties in the same area.
The OP is a moron, and it's pitiful given that that they could actually afford such an expensive home while far more intelligent folks are struggling . . . or, as someone else suggested, it's simply a more subtle troll than "Is Irvington a nice, safe place to live?"
As a buyers price point increases, expectations do as well, and often times the relationship is not linear, at least at first. the buyer thinks to herself, I have over $1M to spend, I should be able to find "the perfect house".
the fact that no such house exists can initially lead to frustration, until such time as the buyer realizes that compromises must be made, regardless of how much you have to spend. as a rational buyer becomes more familiar with the market in a particular town, expectations should gradually fall back in line with price.
IMO, the post above me comes off as nothing but sheer jealousy, though i can't say it's surprising. the OP certainly could have chosen his/her words more carefully in conveying his/her initial thoughts.
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) to get the hell out of this over crowded place. 
