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Old 12-25-2008, 06:51 PM
 
3,853 posts, read 11,855,721 times
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Quote:
Originally Posted by evilnewbie View Post
You should NOT buy a home (that you LIVE in) as an investment... it should be a HOME... if its in your price range than you can still buy it (albeit underbid the home) and you should be fine because you are paying a realistic price for it... however if you are buying for investment (i.e. you do NOT live in the home), its probably a poor time to buy (the idiots are buying now and losing money)... you can wait it out...
I agree but if you are in the position of buying. Definitely time it out. Even if the house is going to be your home. If you see that there is pressures pushing down the housing market, why rush it? Wait until the smoke is starting to clean then buy.

I am considering buying in 2011-2012 when I get out of school (saving up down payment right now) and from the looks of it, that is going to be a great time to buy.
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Old 12-26-2008, 07:34 AM
 
3,722 posts, read 4,717,359 times
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Anyone buying now better pray the neighborhood does not go through a wave of foreclosures. Who then knows what you've bought into? The homes may be bought by investors and you could end up the only owner in a neighborhhood of renters. It could turn into a ghost town.
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Old 12-26-2008, 07:37 AM
 
Location: Keller, TX
5,670 posts, read 5,373,404 times
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Quote:
Originally Posted by trishguard View Post
It could turn into a ghost town.
I'd LOVE to be the only one in the whole neighborhood, that sounds ideal!!

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Old 12-26-2008, 08:22 AM
 
Location: US
1,189 posts, read 3,672,611 times
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Quote:
Originally Posted by Nepenthe View Post
I'd LOVE to be the only one in the whole neighborhood, that sounds ideal!!

For real. I'd buy up all the surrounding property and rent it out to my friends. Then we could setup road blocks and charge a fee to drive though.

Who runs bartertown???

(Where are my meds, hmm)
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Old 12-26-2008, 09:37 AM
 
40,995 posts, read 25,426,081 times
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Quote:
Originally Posted by Thatguywho View Post
No matter what price you bought it at I can guarantee you will be able to buy the one next door for much cheaper in late 2010 and 2011...or 2012 or 2014...

.
You really cannot guarantee this. Housing markets vary widely across the country. There are a multitude of mini-economies in every state that defy what the national economy is doing. Plus, vague predictions like "much cheaper" and "late 2010 and 2011...or 2012 or 2014..." is too much wiggle room for credibility.

While your advice is probably generally solid, people do need to look at their personal situations and the specific economic factors of the area they are potentially looking to buy into.
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Old 12-26-2008, 10:21 AM
 
242 posts, read 674,071 times
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Quote:
Originally Posted by DC at the Ridge View Post
You really cannot guarantee this. Housing markets vary widely across the country. There are a multitude of mini-economies in every state that defy what the national economy is doing. Plus, vague predictions like "much cheaper" and "late 2010 and 2011...or 2012 or 2014..." is too much wiggle room for credibility.

While your advice is probably generally solid, people do need to look at their personal situations and the specific economic factors of the area they are potentially looking to buy into.

no, if you buy now you will be paying more than it will be worth for a decade or more..no matter where you buy. Even if it is a foreclosure.
2001 prices are real market value for a normal economy (plus a year over year of 2 to 3%)... now factor in a bust economy and a housing crash that makes it a buyers market.

A 'real deal' would be 2001 prices of your neighborhood MINUS about 30%.

If you buy now, you are probably buying way way over 2001 prices for your neighborhood, no matter where you live.

Every single bust in real estate is followed by a long, very long, stagnation period. After the short reo boom this year, it will finally go towards the bottom with nothing to stop it.

Do not buy a home now. You will regret it. For the very well off it will just be a bit of a loss. For regular joes and janes, who I am talking to, it will be devestating.

Why do that to yourselves. There is NO harm in just waiting. Stop drinking the 'buy now' kool aid.

They have been saying on TV that now is the time to buy realestate and stocks every single week since the crashes started.

Stocks started crashing in oct 2007, homes in oct 2005....every month they went down and have not stopped...but tomorrow will be the rally to end all rallies and you do not want to miss it!!!!

yes you do.
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Old 12-26-2008, 11:04 AM
 
40,995 posts, read 25,426,081 times
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"no, if you buy now you will be paying more than it will be worth for a decade or more..no matter where you buy"

So, now you are going well beyond 2014.

As I said, in general terms, your advice is probably quite solid. But people still need to evaluate their personal situation and look at the local economic factors when making this decision. Frankly, it's people not doing their own homework but instead listening to general advice and the media that is responsible for part of this mess. Your experience and analysis is probably quite good, but to presume that it is applicable EVERYWHERE is not supportable. Just as there are areas in this country that have been hit hard, there are other areas where the impact is lessened by local economic factors. People need to think it through, and make the decision that works for them, personally, for where they live. The situation isn't the same everywhere in this country.
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Old 12-26-2008, 12:54 PM
 
28,453 posts, read 73,487,294 times
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Default Simply not true...

Quote:
Originally Posted by Thatguywho View Post
...

Stocks started crashing in oct 2007, homes in oct 2005....every month they went down and have not stopped....
Just as there are MANY areas where home prices increased well past Oct '05, and a small number of MLS zip codes that continue to see PRICE GAINS there are many sectors that have seen share prices increase since Oct '07, and even troubled sectors have numerous standout firms:

GIS - General Mills, Inc. - Google Finance

AZO - AutoZone, Inc. - Google Finance

WMT - Wal-Mart Stores, Inc. - Google Finance

ROH - Rohm and Haas Company - Google Finance


I am quite sure that there are plenty of such examples of outliers in the Case-Schiller data too -- the point is that when one buy ONE house it is MUCH MORE like buying ONE STOCK than an index. While I also agree that, in general, MOST neighborhoods will see MOST houses move in the same direction / trend, the fact is there ARE "trend bucking" properties just as there are INDIVIDUAL FIRMS that perform far better than shares of firms even in TROUBLED "sectors".

It does not matter if you are a "trader" or "buy & hold" investor in stocks, you need A LOT of insight into what/'how prices move. While I tend to agree that "market timing" is mostly LUCK, there is ample evidence that people who have great analytical abilities AND lots of experience AND access to the best data TEND to be MUCH LUCKIER than mere odds would suggest. In a similar way, people who have educated themselves, have an appropriate time frame and purchase properties with appropriate motivation will ALMOST ALWAYS do better than those who behave impulsively.

You can go on spouting foolishness about the CERTAINTY of losses OR you can admit that your Chicken Little rants are self serving and not based on reality.
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Old 12-26-2008, 01:22 PM
 
Location: in my imagination
11,583 posts, read 18,997,031 times
Reputation: 8070
Quote:
Originally Posted by Thatguywho View Post
no, if you buy now you will be paying more than it will be worth for a decade or more..no matter where you buy. Even if it is a foreclosure.
2001 prices are real market value for a normal economy (plus a year over year of 2 to 3%)... now factor in a bust economy and a housing crash that makes it a buyers market.

A 'real deal' would be 2001 prices of your neighborhood MINUS about 30%.

If you buy now, you are probably buying way way over 2001 prices for your neighborhood, no matter where you live.

Every single bust in real estate is followed by a long, very long, stagnation period. After the short reo boom this year, it will finally go towards the bottom with nothing to stop it.

Do not buy a home now. You will regret it. For the very well off it will just be a bit of a loss. For regular joes and janes, who I am talking to, it will be devestating.

Why do that to yourselves. There is NO harm in just waiting. Stop drinking the 'buy now' kool aid.

They have been saying on TV that now is the time to buy realestate and stocks every single week since the crashes started.

Stocks started crashing in oct 2007, homes in oct 2005....every month they went down and have not stopped...but tomorrow will be the rally to end all rallies and you do not want to miss it!!!!

yes you do.
Maybe,maybe not.It depends on a person's situation.How much is being bossed around by someone you rent from and putting up with their rules worth not buying now?

And for those of us that are in a position to pay a house cash paid off you save more money by not having a rent or mortgage if interest rates on a CD were still 5% you might have arguement but interest is practically zilch now.So if I buy a house now for `130k or 140k and it drops 20k more in value in the next couple years if you live in it for a while as your home you'll still be alright nor to mention you can run around friggin naked with a girlfriend in your own place if you want,you can crank up the guitar anytime if you want!
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Old 12-26-2008, 01:25 PM
 
5,090 posts, read 10,045,153 times
Reputation: 3961
One way I can quickly tell I am dealing with a ludicrous bullshhter is when they start the “I garontee it” routine. Whatever “It” is. Does not seem to matter what they are claiming to guarantee (with absolutely no capacity to back up said guarantee.) As if bs-ing someone added credence to their claim.

Overall, I agree that varying by area and present and future conditions there is considerable downside risk to purchasing real estate in the US for now and probably the next two to three years.

However, if you correctly determine your capacity for the downside and factor it in, it does not make that big of difference. For example – if you considered the likelihood of a ten percent drop per year for the next three years, and you could afford a $10,000 expense per year, that would mean you could very comfortably afford to start with a $100,000 property and let it go down $10,000 a year – which may be viewed as the equivalent of $800 a month “rent” (not considering taxes). Many folks can afford that. As potential buyers we consider that tolerable.

I am not saying that 10% per year for the next three years is some magic number. It is just a number to do the math with. Pick your own according to your own risk tolerance, location and conditions. Everyone can do their own risk evaluation and figure what is good for them.

Another example could be a $500,000 house in area where houses are dropping 10% or more per year. That comes out a loss of $50,000 per year or $150,000 across three years – that might not be so tolerable. I would not consider it so.

Point being – If people are going to stop being harmed by following mindless “advice” whether BUY NOW! -- or just as stupid -- DO NOT BUY NOW! They are going have to stop avoiding thought and instead think their situation through.

Fat chance, huh? Back to All Sheep All The Time.
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