Fort Lauderdale area Housing Market (Plantation, Davie: sales, rent, mortgage)

[Wild Style]

^^

even with low rates, it isn't worth it if the house is over priced. It will take a few more years before it is back to where it needs to be.

[casualobserver]

Excellent points, ace and fauve....I'm using this thread to create my own checklist of factors to monitor and weight. May well turn out to be a bit of a Rubik's cube.

Two additional factors for me will be tax effect and equity. A 3K mortgage payment is about the same net out of pocket as a 2K rent payment. And arguably, since you get nothing but the immediate shelter benefit of the rent, you could theoretically lose $24K in value after one year and still be the same as renting. Lastly, I also have a house to sell where I'm leaving from. Assuming both markets are moving somewhat consistently, what I lose or gain on the sale is theoretically offset/reflected in the acquisition cost of the new property.

Much more complicated than it used to be in the ever appreciating market place,

[acegolfer]

Originally Posted by casualobserver

Excellent points, ace and fauve....I'm using this thread to create my own checklist of factors to monitor and weight. May well turn out to be a bit of a Rubik's cube.

Two additional factors for me will be tax effect and equity. A 3K mortgage payment is about the same net out of pocket as a 2K rent payment. And arguably, since you get nothing but the immediate shelter benefit of the rent, you could theoretically lose $24K in value after one year and still be the same as renting. Lastly, I also have a house to sell where I'm leaving from. Assuming both markets are moving somewhat consistently, what I lose or gain on the sale is theoretically offset/reflected in the acquisition cost of the new property.

Much more complicated than it used to be in the ever appreciating market place,

Yes, indeed a pretty complicated problem. Many websites including NYtimes simplify this problem by comparing the cost between owning and renting without considering the benefits. What you also need is benefit analysis, which cannot be generalized. It's all personal and hence people don't really talk about it.

In your case, if the costs are truly roughly the same between owning and renting, then it's a slam dunk to buy. But it seems that you forgot to add the tax/insurance/HOI/maintenance fee to the owning cost.

[Wild Style]

Originally Posted by acegolfer

Yes, indeed a pretty complicated problem. Many websites including NYtimes simplify this problem by comparing the cost between owning and renting without considering the benefits. What you also need is benefit analysis, which cannot be generalized. It's all personal and hence people don't really talk about it.

In your case, if the costs are truly roughly the same between owning and renting, then it's a slam dunk to buy. But it seems that you forgot to add the tax/insurance/HOI/maintenance fee to the owning cost.

NYT and others don't talk about cost benefit because it has nothing to do with the present situation. Paying to much for something that is WAY over priced does not make a ounce of economic or financial sense.

[happymccamper]

Quote: Two additional factors for me will be tax effect and equity. A 3K mortgage payment is about the same net out of pocket as a 2K rent payment. And arguably, since you get nothing but the immediate shelter benefit of the rent, you could theoretically lose $24K in value after one year and still be the same as renting. Lastly, I also have a house to sell where I'm leaving from. Assuming both markets are moving somewhat consistently, what I lose or gain on the sale is theoretically offset/reflected in the acquisition cost of the new property.

TA..and this is the problem my husband and I debate about all the time. Plus buying gives you more housing and neighborhood options. But what are you going to do...we can rent a house for about the same amount we could be paying the mortgage like you said. I just....again we have only lived in South Florida for about 7 mos...so I just don't think we could comfortably choose an area to buy until we are a 100% sure that this is it, this is home. So I am not comfortable making such a big purchase until then...because I do not want to be unhappy with it in 6 months like in the condo we are renting now. I just hope waiting another year to year and 1/2 won't seriously hurt us getting a good home at a good price w/good loan terms....boy I just want it all, huh?

[casualobserver]

As Ace said, there are always personal situation factors that make any general consensus hard to arrive at. But, I do believe there would be general consensus that as long as you have not yet located the perfect location nor the perfect house, there is no compelling economic reason to hasten your decision.

Probably what is harder is if you find that nicely modernized and upgraded house within a few blocks of the ocean and you know you would love living there. Just how long you sit on the sidelines for that situation is tougher.

While we can all anecdotally surmise the bottom has not yet arrived, I really need to hook up with a local professional that shares my passion for monitoring and examining all the statistics. Only then will I feel I can assess "when it has bottomed out" with some degreee of objectivity. I'll be happy to post my assessment of the arrival of the final
bottom, but naturally only once I have completed my own personal transaction.

[LucasMetaphor]

Originally Posted by happymccamper

Okay so what s the real verdict? My hubby and I are renting right now in Coral Springs we are looking to move to Plantation or Davie...but still want to rent to make sure that s where we really want to be...but today at a work function everyone was telling us we should buy! But I thought prices were still going to decline...it would be nice for us to have at least another year to determine where we officially want to buy and save $$...are we making a mistake?

I think there needs to be at least another 20% to 30% correction. before we hit bottom.

[happymccamper]

Originally Posted by fauve

Remember to consider interest rates as well. They reached a bottom of 5 1/2% on a 30 yr fixed about 2 weeks ago. Bernanke is going to have to pull back after at most 9 months when I believe inflation will become the bigger problem. I think the end of this coming summer (September) will be the best time to buy as far as combination of low rates and low price. Prices will still drop further, but low rates will be history by 2009.

I just met up w/my husband for lunch and we were discussing the same thing. Plus we have to consider our moving costs too. We are not currently happy where we are so we are definitely moving, but if we rent again, it will probably be for at least another year...and then we will move yet again. So that is 2 moves that must be taken into consideration. So my question now is, between renting, moving, housing prices and moving costs is it really worth waiting 1-3 yrs for the mkt to hit bottom? How much are we talking about in savings? Is a 300k home going to be 1/2 of that? And if we start shopping, what is a decent offer these days...20-30% of the asking price? We just want to the most for our $$ and do not want to get ripped off. I would hate to buy this fall and then our neighbors houses are 1/2 the price what we paid because we just couldn't stand renting anymore. I don't mind it too terribly, the idea of renting...how most feel..."you are throwing your $$ away", but I just want to be content living where I am living and not move like every year.

[acegolfer]

Originally Posted by happymccamper

I just met up w/my husband for lunch and we were discussing the same thing. Plus we have to consider our moving costs too. We are not currently happy where we are so we are definitely moving, but if we rent again, it will probably be for at least another year...and then we will move yet again. So that is 2 moves that must be taken into consideration. So my question now is, between renting, moving, housing prices and moving costs is it really worth waiting 1-3 yrs for the mkt to hit bottom? How much are we talking about in savings? Is a 300k home going to be 1/2 of that? And if we start shopping, what is a decent offer these days...20-30% of the asking price? We just want to the most for our $$ and do not want to get ripped off. I would hate to buy this fall and then our neighbors houses are 1/2 the price what we paid because we just couldn't stand renting anymore. I don't mind it too terribly, the idea of renting...how most feel..."you are throwing your $$ away", but I just want to be content living where I am living and not move like every year.

So you are moving. Here's an idea.

First, find a house that you might want to move in. Then, instead of buying, try to rent the property. Since the market is so slow, the seller may agree to this. I even found many homes were both for sale and for rent.

Some may suggest renting with an option to buy. It could work but you have to negotiate now the price that you have to pay at the end of the rental period. So it may not be a good idea, when the prices are falling. You will probably get a better price, when you negotiate next year. Perhaps, you can directly negotiate with the seller without involving the agents after renting for a year. I don't know, can somebody pitch in?

Assuming listing prices are 20%-30% higher than the fair prices may not be a good idea. Instead, try to find how much the house is worth to you.

Rational sellers who want to sell fast will set the listing price close to the market price. So you should also consider DOM. If the house was on the market for only 1 week, then going 20% below may not work for you. You may do this for houses that were on the market forever. I personally don't like to buy a house that was on the market for more than 2 months. It simply means either there was no interest or the seller started at a high price and lowered recently.

When negotiating, you want to make the other party happy as well. A good negotiation makes both parties winners. I negotiated twice in the last 2 months. One for selling and another for buying. In both cases, the final price turned out to be within $2k from the average of the listing price and the initial offer (both in my favor). Both properties were on the market for less than 2 weeks and the both final prices were 96.7% of the listing prices.

[happymccamper]

Originally Posted by acegolfer

So you are moving. Here's an idea.

When negotiating, you want to make the other party happy as well. A good negotiation makes both parties winners. I negotiated twice in the last 2 months. One for selling and another for buying. In both cases, the final price turned out to be within $2k from the average of the listing price and the initial offer (both in my favor). Both properties were on the market for less than 2 weeks and the both final prices were 96.7% of the listing prices.

I am confused if it s not a good time to buy....you seem to be...and doing well at negotiating....but then you really think its more worth it to go into another rental for another year and give our $$ to a management co instead of a mortgage co? We have to see what we will be approved for too and what the new loans will be like...but we want to keep the option open if the house and the price was right....and loan ha ha. But I also do not want to buy and then a year later think wow we could have gotten that house for the same price and it has more...ie bedrms, sc pool, or you know...more bang for the buck.