Real Estate Doomers...Please talk me out of purchasing a home!

[gtbguy]

That price point still has some more to come down IMHO. I wouldn't expect for it to drop another 50% though, but I would easily see another 10%-20% drop.

[_Charles_]

Purchasing real estate is always a personal decision that carries risk.
Right now here in the Valley cash buyers are acquiring distressed properties at fire sale prices.
Real estate folks are spreading the hype that "you better get in quick before the deals are gone".
Fact: The foreclosure wave here has not stabilized yet.
Fact: The local UE rate (which only counts folks with active claims) is 9.3%
Fact: Most real estate here continues to lose value.
Truth: If you're a cash buyer and don't negotiate well - you will be paying too much for a given distressed property.

[Ponderosa]

Originally Posted by _Charles_

Purchasing real estate is always a personal decision that carries risk.
Right now here in the Valley cash buyers are acquiring distressed properties at fire sale prices.
Real estate folks are spreading the hype that "you better get in quick before the deals are gone".
Fact: The foreclosure wave here has not stabilized yet.
Fact:
Fact: Most real estate here continues to lose value.
Truth: If you're a cash buyer and don't negotiate well - you will be paying too much for a given distressed property.

[mod cut-- off topic]
As for the foreclosure wave, I don't know how you define "stabilized" but it is greatly reduced from what it was and is falling.

Fact: Anyone who thinks the supply of nice properties is not declining has not been out there looking lately.

[mjd2k]

Just curious what the house sold for at its peak? From my uneducated viewpoint, (the more I learn, the less I know about phoenix real estate) certain areas, such as north Scottsdale seem to have bottomed but are still very expensive realative to what investors are purchasing.

After having owned several rental properties, I can tell you, the projections for maintenance etc, are usually out of whack. Unless you are that rare individual that can sit and look at something wrong and defer it (assuming you can afford to fix it but choose not to). Most upgrades are basically maintenance as you seldom recoup your upgrade costs unless you are flipping.

Did your calculations inlcude lost income on the $100k downpayment? Its not significant if its in gic but if it was leveraged as a revenue generator it would have more impact. For example, that could purchase 4 x 100k revenue properties. (of course you are taxed on income it produces so that may be a wash depending on your taxation level).

Something I consider more now than I did before is the age of the property and what maintenance comes with the advanced years. Also, as your mortgage and house age, who will want that house in 10 years? What demographic will be after an older place vs a new?

If its a lifestyle thing more than an investment and you have $100k sitting there and you have enough cash flow to live the way you want, go for it. Just be commited for up to 10 years. Then you can be almost assured you will recoup your $100k and enjoyed a lifestyle you wanted. If your $100k is sitting in the bank or at risk, you could get more enjoyment out of it in that house than you would having it produce minimal income.

Just some of the thinking I go through when contemplating a purchase

[mjd2k]

Just noticed you are only late twenties. If one of my kids had $100k and that was their majority savings, I would be suggesting that they not tie themselves to large long term purchase at that age. I might suggest they deposit half that money in a home, probably a condo, and invest or keep liquid the other $50k. Too many opportunities may be presented to you in the future. Maybe you might become a partner in your practice, want a property in Hawaii, etc.... Liquidity is a good thing. But owing a home is a good thing too. You can have both with $100k.

[observer53]

Just noting that this thread started in January, and revived again today. I think the OP passed on this house, given that he was looking elsewhere in May.

[khuntrevor]

They certainly move in the areas that I follow--at bargain prices, but not giveaways.

[_Charles_]

Originally Posted by Ponderosa

[mod cut-- off topic].

As for the foreclosure wave, I don't know how you define "stabilized" but it is greatly reduced from what it was and is falling.

Fact: Anyone who thinks the supply of nice properties is not declining has not been out there looking lately.

No I got it straight from Azcentral.com would like me to post the article? Here is the link.

[mod cut-- response to deleted material]
The foreclosure wave is still going on.

I can provide news articles on that as well

Fact - my facts are solid.

[mod cut-- the poster is NOT a moderator- your comments in that regard are inappropriate]