Good time to buy? or wait? (San Diego, Orange: foreclosure, rent, mortgage)

[chuck22b]

Originally Posted by jvazjr

I still don't understand why someone, especially a first time buyer who waited this long, would buy in a declining market? It's safe to say prices will continue down. So it would not hurt to wait a bit longer to get that nice home at a cheaper price. And no, because its nice is not going to shield it from a crashing market.

I think it's mainly because life goes on... a lot of first time buyers buying today have already been waiting 3+ years. Have saved up, or prepped themselves to buy a house. Sure they can wait longer, but they see the intrinsic value that exists in the market today and are tired of putting their lives on hold.

Apparently, these people are dumb enough to see the value of buying now, can afford it, and just want their lives to move on already.

I only see this trend continuing as homes continue to be more affordable, and more people realize they can have a nice home, in a nice area, instead of being stuck paying high rents in a bad/congested area.

-chuck22b

[jvazjr]

So now these falling house prices are some sort of opportunity for prospective buyers. Total bologny by the way. It's blatantly obvious that housing prices will plummet. Every economist guarantees it, and even NAR has cooled their rhetoric. When NAR isn't pumping out false promises of instant riches, you know something very ugly is afoot.

That's why it is so frustrating to see new buyers venture into this firey pit. I'm not worried about somebody that is selling and then buying. It's not smart, but they'll fare better. The first time buyers will be screwed when they owe more than the house is worth, and that's practically guaranteed to begin as soon as they close on it. On top of that, they need to build up equity of about 8% of the house's future selling price just to be able to sell without bringing money to the table. It's one of those pesky little things nobody tells a new homebuyer.

On top of that, they're putting more than half their paychecks into this depreciating liability. That's not how people are supposed to live, but it's what they'll do for the expensive emotional satisfaction of paying $400k for a pile of sticks, cement, and dirt. Because life goes on.

I know people that are buying now, in this awful SoCal market, and it drives me NUTS listening to them talk about all the aesthetic and emotional appeal of their dream home. I know they're going to be in the same boat as the rest of my friends and be completely screwed in three years. Is this what is called 'life goes on'?

[Donn2390]

Originally Posted by jvazjr

I know they're going to be in the same boat as the rest of my friends and be completely screwed in three years. Is this what is called 'life goes on'?

In three years the market will have turned around and all of your friends will be laughing at you, sitting there on your thumbs..! Up and down cycles have gone on forever, and will continue to do so. YOU WILL NEVER LOSE MONEY ON CALIFORNIA REAL ESTATE..! Look at history, and don't be a nay sayer... You will be wrong... Still, or again.

[jvazjr]

I get annoyed by people that assume that because I advocate not buying in a declining market, I must be a renter. LOL. Whatever, anyway. So you really think you can NEVER lose money in RE? Again tell that to the millions of families losing their homes NOW.

Do me a favor and YES please do look at history to make an educated decision instead of just saying 'prices will go up because I said so'. Those who fail to do their homework and buy just because some uninformed person says ' RE always goes up' deserves to lose their homes now or in the near future. Nuff said.
The New York Times > Week in Review > Image > Graphic: A History of Home Values

[LivingLikeAGradStudent]

Of course you can lose money on real estate in California. Say you were a first-time home buyer in summer 1991 and needed to move (and sell) for whatever reason in fall 1996. You likely would have lost money even before taking real estate transaction costs into account. I worry about young buyers feeling pressure, internally or otherwise, to buy. Chances are one or both workers in a couple would change jobs within a half-dozen years and would be in a position to move. There is no shame in owning if the fundamentals don't add up. If they do, go for it. But the era of escalating house values across the board has ended for the foreseeable future.

[evolutionrules]

Reasons to buy:
-can afford $350,000 mortgage
-interest rates low but will eventually increase to fight inflation
-in area where we are looking, "good" houses being bought once they reach $350k
-want our kids to be settled before school starts in Sept.
-house we put an offer on is listed at $380k and we offered $350. It is turn key and has every upgrade imaginable. If it drops to $325k in the fall then our kids have to transfer schools and that is not OK
-house sold for $590k 18 months ago. I'm OK with the deal I'm getting.
-we don't plan on selling and moving for at least 20 years. Once kids are in college then maybe.

Am I dumb for buying now?

[rammi43]

Originally Posted by evolutionrules

in area where we are looking, "good" houses being bought once they reach $350k

house we put an offer on is listed at $380k and we offered $350. It is turn key and has every upgrade imaginable.

Could you please tell me which city.

Thank you

[evolutionrules]

Winchester/Temecula/Murrieta

[sheri257]

Originally Posted by evolutionrules

We don't plan on selling and moving for at least 20 years. Once kids are in college then maybe.

Am I dumb for buying now?

Yeah. Especially if you want to overpay ... which is exactly what's going to happen.

If you absolutely need the house for family or other reasons then, you should buy. But, if you're in flexible situation, you're definitely going to pay too much.

Remember: just because you're planning to stay in the house forever doesn't mean your life circumstances aren't going to change. What if you lose your job and/or need to take a job somewhere else? Then you'll be in a negative equity situation where you can't sell the house at all without having to pay a lot of cash at the close.

This market crash isn't even one year old yet. You have to remember that the price run up took ten years and the last five years was totally crazy so ... It will probably take at least five years for us to reach bottom here. There's a lot more downside to go.

The right time to buy will be when prices start inching up a little bit. That's when you'll know we've hit bottom but ... we're not anywhere near that point yet.

[sheri257]

Originally Posted by Donn2390

In three years the market will have turned around and all of your friends will be laughing at you, sitting there on your thumbs..! Up and down cycles have gone on forever, and will continue to do so. YOU WILL NEVER LOSE MONEY ON CALIFORNIA REAL ESTATE..! Look at history, and don't be a nay sayer... You will be wrong... Still, or again.

Look: I'm very bullish on California real estate and I'm definitely going to take advantage of this market crash to buy more property but ...

To tell people they'll never lose money in California real estate is absurd. Especially since the number of foreclosures in California, right now, exceeds the number of actual home sales ...

Obviously a lot of people are losing a lot of money in California real estate ... right now.

If you think this market is going to turn around in just three years, think again. Obviously you haven't actually looked at history because the last real estate crash took 5 years to reach bottom and a total of 9 years for prices to fully recover ...

This market crash is much worse. During the '90s it took five years for prices to drop 12 percent. Here ... it's taken less than a year for prices to drop 15 percent ... and prices are still dropping.