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Can't speak for everyone else, but I have no sympathy for someone who buys in an over-inflated market without being sure they're in it for the long haul. That $300,000 would have been much more useful invested elsewhere.
You don't have to own your house all the time. Rent when the market isn't right or if you're not going to be there for more than a few years. Buy when you're ready to settle down and have this happen:
The home we sold a few months ago was only 7 months old...we bought it at the high end of the market and were planning on staying until my husband's job changed and we HAD TO LEAVE. You don't know this persons situation. They didn't say they couldn't afford it. They just want to know when people think the market will change. I don't think he/she was asking for sympathy! He bought when the market was high b/c that is what the market dictated. LOTS of people bought when the market was high...what, they should have had a crystal ball and known the market would go down? How long should they have waited? WHat if the market stayed high and they waited 5 years for the market to go down...5 years of renting and throwing money out the door.
For the wizards that seem to think It's more important to attack my spelling in a thread after a long day, *********.
For the folks that tried to add input to the thread, Thank you.
For the smart behindsthat can forecast the housing market prices, and knew that a year after I was transferred to the area that housing prices were going to crash, try and formulate an answer to the question.
Last edited by FindingZen; 06-25-2008 at 10:40 AM..
Reason: Watch the language...
For the wizards that seem to think It's more important to attack my spelling in a thread after a long day, *********.
For the folks that tried to add input to the thread, Thank you.
For the smart asses that can forecast the housing market prices, and knew that a year after I was transferred to the area that housing prices were going to crash, try and formulate an answer to the question.
Thats what a thought and Im glad you ******
Last edited by FindingZen; 06-25-2008 at 10:40 AM..
Reason: foul language
For the wizards that seem to think It's more important to attack my spelling in a thread after a long day, *********.
For the folks that tried to add input to the thread, Thank you.
For the smart asses that can forecast the housing market prices, and knew that a year after I was transferred to the area that housing prices were going to crash, try and formulate an answer to the question.
I have no crystal ball, but I and many others were easily able to see that we were in a bubble and that prices, at some point, had to come crashing down. When housing prices are going up 20% per year while wages are stagnant, it is not hard to see that something is wrong. It's been talked about and predicted on this site and many others like it for years... Moderator cut: Competing site.
After convincing my wife that we were in a bubble, in 2005 when we moved to NOVA, we decided to rent and are so thankful that we made that choice. We were tempted, and the neighborhood that we almost bought into is now in the toilet with foreclosures going for literally 1/2 the price the builder was selling for in 2005.
Sure, we've "thrown away" some money on rent. But that is no different than "throwing money away" on interest payments to the bank and tax payments to the county. Whether you rent or buy, we're all "throwing money away". The only difference is whether it goes to a landlord or the bank. In the first year of onwership, 80% or more of your payment is interest. Unless you pay 100% cash for your home, you'll be "throwing away" just as much money on interest and taxes as you would in rent.
So, we've paid rent for a couple of years, but by doing so we avoided being comletely underwater in a home that has lots half its value.
Last edited by FindingZen; 06-26-2008 at 07:07 AM..
I have no crystal ball, but I and many others were easily able to see that we were in a bubble and that prices, at some point, had to come crashing down. When housing prices are going up 20% per year while wages are stagnant, it is not hard to see that something is wrong. It's been talked about and predicted on this site and many others like it for years... http://www.thehousingbubble2.blogspot.com/
After convincing my wife that we were in a bubble, in 2005 when we moved to NOVA, we decided to rent and are so thankful that we made that choice. We were tempted, and the neighborhood that we almost bought into is now in the toilet with foreclosures going for literally 1/2 the price the builder was selling for in 2005.
Sure, we've "thrown away" some money on rent. But that is no different than "throwing money away" on interest payments to the bank and tax payments to the county. Whether you rent or buy, we're all "throwing money away". The only difference is whether it goes to a landlord or the bank. In the first year of onwership, 80% or more of your payment is interest. Unless you pay 100% cash for your home, you'll be "throwing away" just as much money on interest and taxes as you would in rent.
So, we've paid rent for a couple of years, but by doing so we avoided being comletely underwater in a home that has lots half its value.
Someone else made that arguement...about throwing away money on interest to the bank. But, here is my thinking: when you do buy (whenever you think the market is a good time to buy or not) you will have to pay that interest like everyone else (unless 100% cash as you said)...so you can either do that now and be that much farther ahead or you can throw money away renting and then throw more money away to the bak on interest when you do finally buy. I understand the interest amount may be different IF you pay a lot less...but in order for prices to get that low it will take awhile and then you are back in the same spot renting for those years.
And, good for you for seeing there was a bubble. But, not everyone thinks that way. The way we looked at stuff: we need space/room for our family and it was worth it to us to have a home. We didn't want to rent...we like having pride in ownership and we like investing in ourselves (just like I wouldn't lease a car, I wouldn't rent an apartment)....My point is: to each his own. But people shouldn't be calling the OP an idiot b/c they don't agree with the way he handled his living situation. It is not like he is trying to walk away or is not affording his home. He just simply asked when people thought the market would bounce back. I am so tired of coming onto this forum and finding people who think they are know-it-alls b/c they knew the decline was coming. It is so easy to say that now b/c the bubble did burst...but if it hadn't for years to come then what would you be saying to your wife then about renting?
I am not getting on you specifically, just saying what I have seen on this forum.
Someone else made that arguement...about throwing away money on interest to the bank. But, here is my thinking: when you do buy (whenever you think the market is a good time to buy or not) you will have to pay that interest like everyone else (unless 100% cash as you said)...so you can either do that now and be that much farther ahead or you can throw money away renting and then throw more money away to the bak on interest when you do finally buy. I understand the interest amount may be different IF you pay a lot less...but in order for prices to get that low it will take awhile and then you are back in the same spot renting for those years.
And, good for you for seeing there was a bubble. But, not everyone thinks that way. The way we looked at stuff: we need space/room for our family and it was worth it to us to have a home. We didn't want to rent...we like having pride in ownership and we like investing in ourselves (just like I wouldn't lease a car, I wouldn't rent an apartment)....My point is: to each his own. But people shouldn't be calling the OP an idiot b/c they don't agree with the way he handled his living situation. It is not like he is trying to walk away or is not affording his home. He just simply asked when people thought the market would bounce back. I am so tired of coming onto this forum and finding people who think they are know-it-alls b/c they knew the decline was coming. It is so easy to say that now b/c the bubble did burst...but if it hadn't for years to come then what would you be saying to your wife then about renting?
I am not getting on you specifically, just saying what I have seen on this forum.
It was impossible for the bubble not to burst! How do I know this? It's easy. If housing continued to go up at 20% per year, in just a few short years, everyone who owned a home would be a millionaire and all homeowners could quit their jobs and live off of home equity for the rest of their lives. We'd have a class of homeowner millionaires and renter peasants...
Does that sound like a sustainable economy to you?
Why do you take this topic so personal?
You resort to calling those of us who take interest in macro-economics "know-it-alls". Trust me, I was telling anybody who would listen to me not to buy during the bubble. Most people looked at me like I was totally insane. They were too caught up in the hype and mania to listen to my point of view. They were too eager to get rich by doing nothing... just buy a home and get rich...
It was impossible for the bubble not to burst! How do I know this? It's easy. If housing continued to go up at 20% per year, in just a few short years, everyone who owned a home would be a millionaire and all homeowners could quit their jobs and live off of home equity for the rest of their lives. We'd have a class of homeowner millionaires and renter peasants...
Does that sound like a sustainable economy to you?
Why do you take this topic so personal?
You resort to calling those of us who take interest in macro-economics "know-it-alls". Trust me, I was telling anybody who would listen to me not to buy during the bubble. Most people looked at me like I was totally insane. They were too caught up in the hype and mania to listen to my point of view. They were too eager to get rich by doing nothing... just buy a home and get rich...
It's not this topic that I am taking so personally, just the fact that some people on here think they know it all and thus call people names. (not just this topic, others as well)
Yes, the bubble would burst...my point was no one knew when that would happen...it could have happened 5 years from now and those who rented for those 5 years could have been paying a mortgage towards something they would own for those five years.
Anyway...
It was impossible for the bubble not to burst! How do I know this? It's easy. If housing continued to go up at 20% per year, in just a few short years, everyone who owned a home would be a millionaire and all homeowners could quit their jobs and live off of home equity for the rest of their lives. We'd have a class of homeowner millionaires and renter peasants...
not to mention the stock market was at an all-time high. The writing was on the wall. There's a point where Greed kicks in, look at Enron
It's not this topic that I am taking so personally, just the fact that some people on here think they know it all and thus call people names. (not just this topic, others as well)
Yes, the bubble would burst...my point was no one knew when that would happen...it could have happened 5 years from now and those who rented for those 5 years could have been paying a mortgage towards something they would own for those five years.
Anyway...
You're right that nobody knew when it would happen. I just knew that in 2005, the very ordinary townhomes that my wife and I looked at in Loudoun County were not worth over half a million dollars! I had to bite my tongue to keep from laughing when they told me the price of this townhome was $525k. That same townhome would rent for no more than $1500 per month yet mortgage payments would have been nearly $3000 per month. It was clear to me then that eventually balance would be restored and that I would be better off by waiting this one out.
Today, there are several of these townhomes listed on the MLS as short-sales and foreclosures. The lowest of which was built in 2005 and is listed for $250k. That's $275k cheaper than the 2005 price.
In hindsight, it's clear that 2005 was the peak of the bubble. I certainly didn't know that at the time. But, I knew I wasn't going to pay that kind of price for a very ordinary townhome and that one day the mania and hype would be exposed for what it really was.... just a bubble.
You're right that nobody knew when it would happen. I just knew that in 2005, the very ordinary townhomes that my wife and I looked at in Loudoun County were not worth over half a million dollars! I had to bite my tongue to keep from laughing when they told me the price of this townhome was $525k. That same townhome would rent for no more than $1500 per month yet mortgage payments would have been nearly $3000 per month. It was clear to me then that eventually balance would be restored and that I would be better off by waiting this one out.
Today, there are several of these townhomes listed on the MLS as short-sales and foreclosures. The lowest of which was built in 2005 and is listed for $250k. That's $275k cheaper than the 2005 price.
In hindsight, it's clear that 2005 was the peak of the bubble. I certainly didn't know that at the time. But, I knew I wasn't going to pay that kind of price for a very ordinary townhome and that one day the mania and hype would be exposed for what it really was.... just a bubble.
Gotcha!
Yes, we too were amazed at some of the prices when we started looking last August. We closed on our single family home this past January...we paid $525K for what we would pay $125K in Central PA. The prices do floor me. And, yes, we KNEW we would "lose" some money buying now...This home is probably "worth", at this very moment, $475K and we have only been in here 5 months. For us, renting a small apartment with toddler twins, a yellow lab, a cat, and two adults was just too cramped. We thought about waiting (as we were in a year lease due to renting while our home in Philly sold and could have stayed until this upcoming August) BUT the storage costs for all of our furniture and belonging would have cost us a BUNDLE on top of renting. My point is: I can see why some people are holding off buying...especially first time buyers. But for others sometimes buying (even in this market) is the best thing to do. (Our rent was $1500 a month and then storage was $2500...$4K a month total...We couldn't afford that. We pay $2700 in mortgage.) The good news is we really aren't "losing" anything until we go to sell...and hopefully in 10 years or so we will be at at least break even
So...I can respect your point, but I just wish others (not you) could see where not everyone is an idiot for buying right now...or buying in the past when need outweighed market conditions.
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