Beaverton Condo Values (sound, advice)

[Nell Plotts]

Originally Posted by karlsch

I think it's the Cujo Towers!!

Huh???? I don't get it.

[gypsydoc]

Originally Posted by Revilla

My daughter is considering buying a condominium in the Beaverton/Hillsboro area. I see quite a few listed in the 150 - 175K range. Any ideas on this market and what we should expect with regard to the asking price? Is there a glut, would she be in a good position to bargain. Any insight would be appreciated.

Please allow my two cents. Yes, there are quite a few on the market currently Condo ownership is not the same as home ownership. With a condo, one is actually buying "air space" and the shared rights to the common areas - not the actual land and building. It behaves the same, as in one can buy and sell, just as one does a detached home.

The benefits are usually less maintenance, smaller yard space, and that one can purchase more square footage for the money, but then there are HOA fees (Home Owner Assoaciation Fees). They can range from a few dollars a month, like $20 up to $300-$400 per month (sometimes more for more upscale developments). Sometimes they cover a wide range of utilities, amenities, management fees, outside maintenance, front of the unit lawn care, cable television, water, sewer, trash, insurance, etc... all or part, it just depends.

If you find something you like, the realtor should write the contract that the purchase is subject to satisfactory inspection, financing, and appraisal. You will have at least 10 business days for the inspection. One should have the inspection as soon as possible after the buyer and seller come to an agreement. There is no need to have the inspection before putting in an offer or before you have a signed contract. Save your money until after there is an agreement.

If you don't like the results of your inspection, you can get out of the contract. Easy, peasy. However, no matter what you are purchasing, there WILL be things wrong with it.. even brand new. After the inspection you and your realtor can decide what repairs to ask for, or if you want a repair allowance, or a credit, reduce the price, or just fix the things your self. Your realtor should make sure that you are well aware of the dates on the contract when things need to be done.

Also, you should be receiving the Codes Covenants and Restrictions (CCR's) within a day or so.. and you have a few days (depends on your contract) to read it over. Some things to be aware of are ... are pets allowed? size restrictions? breed restrictions? parking availability? etc... This information including appliance care, construction information, meeting frequency, etc... (It's usually quite a thick "book") but should be read! Preferably not before going to bed. It is usually perceived as rather boring.

Now, for the crystal ball part. (Ha.. wish I had one.)... Whether or not we are falling /sliding or flirting with a recession, there are some things that seem to go hand in hand with contracting economies. One of those is that interest rates tend to rise. Another, tied in with the subprime mortgage fiasco is the changing lending programs that are still fluctuating from at least weekly, if not daily. (I'm not a lender, so I don't know every program available, I do try to keep abreast for specific clients, however). The ability to purchase right now is getting harder and harder. Where some loans recently had a 680 FICO score as an "sweet spot" to try to attain, it has now been raised to 720. If interest rates start to go up, the amount of property someone can qualify for will go down - more of the payment will be buying ... well nothing, except helping to line the pockets of the lender.

That being said, there is the other odd bit of human behavior where although the rule is Buy low and sell high... Most people are scrambling to buy when the prices have shot up and refuse to buy when the prices are at the lowest in years. That, I have difficulty understanding, but I see it a lot right now. Maybe some of you who read this can address this strange, yet very common phenomenon.

There are many people who bought at or close to the peak of the buying action and now want to sell and they're, well, way upside down on the home. I can understand why someone shouldn't sell unless they really had to these days... But buying? This is a great time. No one knows where the perfect low interest rate meets low price points is or when the perfect loan program will show up. I have concerns that the still tightening criteria to even qualify to buy may end up shutting more and more people out of home ownership in the near future. Again, wish I had a crystal ball... For those who can buy at prices like they were in 2004 or 2005.. How cool is that?

If you want to buy, I say go for it. Right now, FHA loans are solid, so are VA. There are programs that assist with the 3% required downpayment that can STILL enable people to get in a home with no money (or very little) out of pocket. Are these bad loans? No. They are not subprime. People still need to have good credit, good employment, etc. But it IS possible, even now to buy well. There are some realtors who are aggressive on buyer's behalf to get them the best possible price. The only thing I'm certain of is that change is a constant.

Make sure you get professional advice. Of course, I wish you the best and I hope this helps.

[Nell Plotts]

A home should not be viewed as 'investment' like a stock. It is housing. Don't purchase unless you plan to live there AT LEAST 7 years. HOA fees are for maintenance similar to what you would spend if you purchased a single family dwelling but lenders include that expense when determining if you qualify for a loan. Not quite fair, but that is what they do. Sometimes there are unbudgeted expenses that result in special assessments, unexpected expenses happen with a single family dwelling too. It is important to determine if the HOA has established a reserve fund for major expenses, such as replacing a roof, which is why you want to read its reserve study and financials.

Daughter needs to do a financial analysis to determine if she is better off renting than buying. The first step is to list the expenses of a home that she doesn't pay now. Be sure to include a reserve to replace carpeting, appliances and the like as well as property taxes and interest costs on a mortgage. If renting is cheaper she should save the difference for a future down payment on a home.

[karlsch]

Originally Posted by Nell Plotts

Huh???? I don't get it.

Google is your friend.

[Nell Plotts]

Google is indeed my friend but I can't find the article you referred to. Please PM me with a link.

The OP started this talked about her daughter buying a condo. Here is a useful link to take a look at the cost of buying vs renting: Rent vs. Buy - Financial Calculators from Dinkytown.net

[oldtintype]

Cujo is a reference from a rather lame 1980s film about a rabid St. Bernard that attacked and terrorized people.

[karlsch]

Originally Posted by oldtintype

Cujo is a reference from a rather lame 1980s film about a rabid St. Bernard that attacked and terrorized people.

....and if you Google "cujo" you get more than eleven million results most of which refer to the movie or the Stephen King novel:

cujo - Google Search

[gypsydoc]

Originally Posted by karlsch

....and if you Google "cujo" you get more than eleven million results most of which refer to the movie or the Stephen King novel:

cujo - Google Search

Woo Hooo! :-)

[gypsydoc]

Originally Posted by Nell Plotts

A home should not be viewed as 'investment' like a stock. It is housing. Don't purchase unless you plan to live there AT LEAST 7 years. HOA fees are for maintenance similar to what you would spend if you purchased a single family dwelling but lenders include that expense when determining if you qualify for a loan. Not quite fair, but that is what they do. Sometimes there are unbudgeted expenses that result in special assessments, unexpected expenses happen with a single family dwelling too. It is important to determine if the HOA has established a reserve fund for major expenses, such as replacing a roof, which is why you want to read its reserve study and financials.

Daughter needs to do a financial analysis to determine if she is better off renting than buying. The first step is to list the expenses of a home that she doesn't pay now. Be sure to include a reserve to replace carpeting, appliances and the like as well as property taxes and interest costs on a mortgage. If renting is cheaper she should save the difference for a future down payment on a home.

Gotta say that I tend to disagree with your statement that a house shouldn't be looked at as an investment... Why not? It's the largest purchase most people ever make and if they are not going to get a decent return on it, over time, what's the point? Between tax benefits, appreciation, upgrading, etc., one's home should bring a return. As the market and economy changes, one's strategy may change to be able to maximize the benefit of home ownership. Does it always work? No. Sometimes people lose jobs or life brings changes. Some of those things would happen whether you rent or own anyway.

There is a drive in us humans to have a home. To own land and a building and have a place to roost and rest. Using caution and due diligence in your decision making is crucial... but living in fear of the "what if's" can rob us of some of the most inspiring and joyful options in creating our lives. I guess my test of whether or not I should do something has to do with imagining I am much older looking backwards. The question is, would I regreat doing thus and so or not doing thus and so? 9 times out of 10, the answer is to take the action I'm considering. If you have another way to make a life changing decision, exercise it. If you don't, maybe this system will help a bit?
Best wishes...

Buying one's first home is like a rite of passage. It is a statement of self sufficiency.. Yes, use reasonable care in making your decision, but do what lights you up. Life is very short. Hope that helps!

[Nell Plotts]

OK, let's look at a home as an investment. A good investor compares total return for money put at risk. Use the DinkyTown tool for a start. By any economic measure home prices reached un-sustainable highs these last several years. As any investor knows the value of a capital investment fluctuates. Honest analysts have concluded that home prices are trending down and will so for the next several years. That is not to say that a particular home cannot be purchased for a very good price as the motivation and price flexibility of individual sellers varies greatly.

We are by no means in a 'buy now or be priced out forever' market. I think anyone who is considering a home purchase needs to consider the issue carefully.

My other concern in this situation is that a young lady is thinking about buying. I am not sold on young singles who might marry buying a home because most will want to sell after engagement. The transaction costs of buying and selling are very significant (thanks in part to Realtors fees). If she were to live in the home for more than 7 years she will probably come close to having the home purchase a wash financially, but in all honesty how many young singles will do that.

If she were my daughter I would tell her to build up substantial savings now and after two years consider this issue again.