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'I would guess that most folks selling in a down market are also going to be buying in a down market, so it all works out in the end...'
Which is not very wise I would say. Catching a falling knife is not fun. I would sell now, rent and when values stabilize and bottom out, then buy. But I understand life goes on and all those warm and fuzzies 'Human Factors" always trump logical thinking right?
And God forbid I should rent. What will the family think!
Here you go:
* You bought in 2008. You _can_ afford your payment, so long as you keep your job. Your job is secure, as is your spouse's. So we'll just assume you can always pay your mortgage.
* You still paid non-bottom prices because you bought in 2008.
* By 2010 prices have come down another 20%. (Ignore anyone who lives in Bizarro World where prices never go down).
* At this point you start seeing some neighbors moving in paying 4/5 of what you did. It's a little annoying, but not terribly.
* By 2012-2013 real prices have come down a total of 35% and now are flat, matching inflation with maybe very tiny gains here and there.
* So you're 5-7 years into your ownership. The average time spent by most Americans in a home. You only put 20% down, so you're at best just around break even or a small loss if you sell today. You decide, "hey we can afford our mortgage payments, so we're not losing anything".
* But then you start realizing something. You have a lot less money than your neighbors all do, even though you make the same or even a bit more than them. Your kids go to school with the children of parents who are just like you except one thing: they don't pay as much of their monthly nut to their house. Instead, they buy their kids nicer clothes, safer cars, better educations, more culturally stimulating vacations, nicer colleges, and better futures. Meanwhile, you paid your bank a lot of extra interest, and you paid the previous owners a lot of extra gains. All those people are busy buying nice college educations for their kids too.
* You retire, owning your home, preaching to your kids how somehow your life's decisions were more "righteous" and "moral" than all these other terrible people who looked out for their own well being. It never dawns on you that perhaps you were the selfish one, putting your own impatient emotional need for a house above the future betterment of your family.
'I would guess that most folks selling in a down market are also going to be buying in a down market, so it all works out in the end...'
Which is not very wise I would say. Catching a falling knife is not fun. I would sell now, rent and when values stabilize and bottom out, then buy. But I understand life goes on and all those warm and fuzzies 'Human Factors" always trump logical thinking right?
And God forbid I should rent. What will the family think!
Here you go:
* You bought in 2008. You _can_ afford your payment, so long as you keep your job. Your job is secure, as is your spouse's. So we'll just assume you can always pay your mortgage.
* You still paid non-bottom prices because you bought in 2008.
* By 2010 prices have come down another 20%. (Ignore anyone who lives in Bizarro World where prices never go down).
* At this point you start seeing some neighbors moving in paying 4/5 of what you did. It's a little annoying, but not terribly.
* By 2012-2013 real prices have come down a total of 35% and now are flat, matching inflation with maybe very tiny gains here and there.
* So you're 5-7 years into your ownership. The average time spent by most Americans in a home. You only put 20% down, so you're at best just around break even or a small loss if you sell today. You decide, "hey we can afford our mortgage payments, so we're not losing anything".
* But then you start realizing something. You have a lot less money than your neighbors all do, even though you make the same or even a bit more than them. Your kids go to school with the children of parents who are just like you except one thing: they don't pay as much of their monthly nut to their house. Instead, they buy their kids nicer clothes, safer cars, better educations, more culturally stimulating vacations, nicer colleges, and better futures. Meanwhile, you paid your bank a lot of extra interest, and you paid the previous owners a lot of extra gains. All those people are busy buying nice college educations for their kids too.
* You retire, owning your home, preaching to your kids how somehow your life's decisions were more "righteous" and "moral" than all these other terrible people who looked out for their own well being. It never dawns on you that perhaps you were the selfish one, putting your own impatient emotional need for a house above the future betterment of your family.
Well, in a few years it won't matter, global warming will melt the icebergs and we will all be underwater anyway. And did I SAY we were NOT going to rent for a while. You are very assuming for someone who knows absolutely NOTHING about any of us. And hey have a great evening, its my anniversary and we are going to go out and spend some of this equity on a fine dinner
I wish it were that simple.. that we could take a big hit on our home and even it out by buying something else where we got a deal. Our home is on the market now, we are priced fairly.. I am willing to go down, even to below the recently sold comparables. The issue we are dealing with is that the NEIGHBORHOODS we want to move into, either the properties sell within days, and we aren't prepared in this market to buy before selling ourselves or there is nothing at all. We are not being picky about the homes, jsut picky about the various neighborhoods/pockets/cities we want to get into. We are also picky about the price, we would like to buy something cheaper than we are selling, but we find ourselves even increasing our range a bit for that good property. It is baffling. I'm willing ot give it some time, we are only 3 weeks into selling and only the beginning of the spring market but it is a conundrum, my husband doesn't want to drop our price at all, his rationale being that is sells and we have nothing to buy. I'm not kidding- there is very, very little out there. maybe a lot of people are just waiting it our here in good 'ole Denver.
We put our house in Boston, MA on the market in January. We sucked it up and priced it for 2008, not 2005. It got two offers over asking price the day of the open house. It's now sold.
We're looking to buy in the Northern/Northwest suburbs of Chicago. Currently holed up in an apartment. It looks to me like Chicago hasn't "corrected" yet the way Boston did. Maybe a 6-12 month lag? People out here say, "Well we didn't spike as much." But since we got here in January, I've seen stale listings dropping their prices by tens of thousands left and right. I think the denial is thick and the market here is correcting now.
We're not waiting for a bargain. We want a nice house in a nice neighborhood. But the stories in the media and the dropping prices make it feel less urgent for us to "settle" for something that isn't quite what we're looking for.
Lastly-- I'm horrified by the mushroom farms of McMansions and am hesitant to buy anything, new or old, in areas that have been built up heavily in the last decade. Between the housing crisis and global warming, it's only a matter of time before those behemoths go belly up and I don't want to be around to smell the stench of them rotting (translation-- I'm afraid to buy a home in an area that I think is unsustainable.)
YEAH!!!!!! Someone FINALLY posting on the TOPIC of this thread!!!!
Congratulations on selling Cohdane! I can totally understand your dilemma . I am considering several different scenarios after I sell, and some of the various cities I may move to are still near peak $$$$ and way too high for me to even consider buying yet !!! I know people who have been renting for 5 yrs or more trying to catch the bottom of the market and many are getting really pissy waiting to buy at the prices they want to pay .
But Real Estate IS and always will be about : LOCATION LOCATION LOCATION ! So if people are smart and do their research, there are still a few good deals to be had for those wish to buy instead of rent . Good luck in finding the right new home !
We have our house on the market FSBO. We are in Land O Lakes, FL and also listed on the MLS.
We already own a ranch in the panhandle and are moving there in July.
Have only had 2 families look at the house.
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YEAH!!!!!! Someone FINALLY posting on the TOPIC of this thread!!!!
! I can totally understand your dilemma 
. I am considering several different scenarios after I sell, and some of the various cities I may move to are still near peak $$$$ and way too high for me to even consider buying yet 
.
! So if people are smart and do their research, there are still a few good deals to be had for those wish to buy instead of rent 
. Good luck in finding the right new home 
!
