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Old 05-13-2018, 06:19 AM
 
Location: Cary, NC
31,605 posts, read 55,320,924 times
Reputation: 30155

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Quote:
Originally Posted by RosemaryT View Post
Pay cash?

Okay.

Seriously, I would rather see someone get into a solid-value house rather than wait until they have saved enough to pay cash for a house. Sadly, too many people struggle for years to find a few thousand for a downpayment!

The house that I am in has "poor access" due to a sloped driveway, and a side-loading garage that is hard to get into, and yet it had three offers within 24 hours of being listed. Location trumps everything else.

Here's my best advice: IF a recession hit and you lost 30% of your home's value, would you still be happy to remain there for a decade? Because in a decade, everything can turn around.

People tend to settle when it comes to life partners and homes. My advice: Don't settle.

If you wait for the best, you'll usually find it.
"Pay cash" was only one alternative. It happens more often than most people realize.
"or pay it off or pay down any loan" were the other two alternatives.

It's about equity position in ownership, IF and when your value drops 30%.
Having equity to burn if prices drop is strength, IMO. In 2008-2011 people without equity often were trapped and powerless.
Of course, some people propose squatting through the foreclosure process until the sheriff moves the owner out, but that seems a bit cheesy to me.


And, I saw a great many homes with poor driveways, beautiful houses, languish on the market and take big price hits.
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Old 05-13-2018, 06:38 AM
 
3,969 posts, read 1,596,412 times
Reputation: 12405
Quote:
Originally Posted by Dad01 View Post
Forgive me for using a cliched term but was wondering what are the basic things one can do to buy a relatively "recession proof " house in this market

Obviously no one can accurately predict when or if the housing prices will go up or go down

In the areas I'm interested in upper midwest , the inventory is low and it is pretty much a sellers market

Here was my general principles I'm sticking with when it comes to finding a relatively recession proof house

1-In a good school district obviously for grade/middle and high school

2-smaller house in a subdivision where most houses are higher priced

3-In a town with relatively stable and diversified economy

4-House which is not turn key ready but one in which I can put some sweat equity over the years

5-Not too big , not too small 4 bed/3 bath on average

6-close to public transportation/major highways

7-single family house , not a condo or town house

8-not more than 30 yrs old

PLEase advise if any of the above assumptions are inaccurate and if there is any other suggestions that can be given

the biggest problem I have right now is that inventory is so low that there is a ton of competition for the good deals and esp from cash only buyers
I would quibble with #8, but the rest are not bad criteria.
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Old 05-13-2018, 07:05 AM
 
98 posts, read 40,325 times
Reputation: 248
Re: #5 - I understood that starter homes were the ones that saw the smallest drop in value and were the first to bounce back when the market began to recover. Obviously you need a home big enough to meet your needs, but if the sole criteria is how it would perform in a recession I think that may be a bit big.
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Old 05-13-2018, 07:45 AM
 
5,681 posts, read 7,263,702 times
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I would probably replace #8 with something like “all major systems (roof/plumbing/electrical/HVAC) are up to date and in good condition”
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Old 05-13-2018, 08:09 AM
 
10,270 posts, read 6,500,789 times
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Quote:
Originally Posted by MinivanDriver View Post
I would quibble with #8, but the rest are not bad criteria.
Unless that's his own criteria which is fine. but not good general criteria. Many older homes were better built than than newer ones. You just need to make sure the electrical and plumbing have been kept up to date on old homes.
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Old 05-13-2018, 08:34 AM
 
Location: Illinois USA
291 posts, read 147,916 times
Reputation: 211
Quote:
Originally Posted by CapitalBat View Post
Re: #5 - I understood that starter homes were the ones that saw the smallest drop in value and were the first to bounce back when the market began to recover. Obviously you need a home big enough to meet your needs, but if the sole criteria is how it would perform in a recession I think that may be a bit big.
so you think 4 bed/3 bath is too big ?

How about 3 bed /2 bath ? less likely to take a hit ?
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Old 05-13-2018, 08:36 AM
 
Location: Illinois USA
291 posts, read 147,916 times
Reputation: 211
Quote:
Originally Posted by GoPhils View Post
I would probably replace #8 with something like “all major systems (roof/plumbing/electrical/HVAC) are up to date and in good condition”
good idea

in my flawed opinion i added # 8 precisely because I thought older houses would be falling apart

I'm a total amateur guys ,never owned a house ever

and I grew up in a big house, family of 5 but our parents were house poor so I absolutely dread that !
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Old 05-13-2018, 08:38 AM
 
Location: Illinois USA
291 posts, read 147,916 times
Reputation: 211
Quote:
Originally Posted by BoBromhal View Post
depends on how reliable your income stream is.
good point

I mean Ive always had the same income since I got done from college approx 13 yrs ago , never been "laid off" and have always had good offers so I guess I would say its stable but you can never be 100 % sure
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Old 05-13-2018, 08:42 AM
 
Location: Illinois USA
291 posts, read 147,916 times
Reputation: 211
Quote:
Originally Posted by MikeJaquish View Post
Avoid "Mistake Houses."
A "Mistake House" will be the first in your market to take a price hit, and may be very difficult to re-sell should you need to move on or cash out.

1. Flood plains.
2. Adjacent electrical power transmission lines.
3. Significant structural issues, particularly broken foundations.
4. Poor access due to bad driveways. Sloped up or down. Weirdly curved. Side entry garage that doesn't have adequate clearance for easy entry and exit.
5. Adjacent to loud commercial or industrial nuisances.

And, pay cash, or pay it off or pay down any loan.
Nothing frees you up in any market like not being encumbered by a debt that is more than resale value.

good points
esp since I like basements so I would not like an area where water table is too high

how can I predict if the area will not go to hell in the next few yrs ?
e.g there are a few areas in the SW suburbs of chicago which were great places to live approx 10-15yrs ago but recently with a lot of people leaving from the south side and cheaper apartment options available these areas are becoming dangerous and school districts suffering.
is it best to avoid any areas < 10 miles of high crime localities or those areas with a lot of cheap housing options, I hate to discriminate on basis of income but its a scary thought to lose 30 % of your home value overnight
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Old 05-13-2018, 08:48 AM
 
Location: Illinois USA
291 posts, read 147,916 times
Reputation: 211
And I truly appreciate the feedback !

one more thing I have always gravitated towards burbs of big cities when it comes to buying a house, my thought being big cities ( like STL , chicago size) will always have people looking to move in so it will not be hard to resell

I have stayed away from looking at average sized towns ( under < 300 k) as I feel these town are very dependent on one or two industries and if they close or move then the whole town goes to hell and property prices suffer, case in point Decatur IL, or Danville IL
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