Need Real Estate Advice for Clearwater, Safety Harbor, and Countryside Areas (Spring Hill: sale, foreclosures)

[floridagirl777]

Hello! My family and I are moving to the Clearwater area in a couple of months. My husband and I both have jobs lined up. We are going to rent out our current home in Spring Hill (we already have a renter lined up who will move in June) since it is impossible to sell it in the current market. We qualified for another mortgage, so we are starting to think about what we want to do for housing down in Clearwater.

My question is, would we be better off purchasing a home right away or renting for a year or so? Interest rates are really low right now, and we'd like to take advantage of them while we can. But if the market is going to stay like it is for a while, it might be better to rent and save up a larger down payment for a better home. (Right now we can afford a home around 230K. If we saved for a year or so, we could probably afford something closer to 300K.)

So, what does the market seem like it is doing down there? Should we buy now while rates are low or should we wait and risk the rates going up?

[Pragmaticus]

My $0.02.

The interest rate doesn't look to go anywhere for the next one to two years, just watch the Fed's action for that. Will they be the same as today? Probably not. But you are not going to see signifcant change from where we are today. Also, keep in mind that interest rates just don't shoot up or down like crazy. You would see the pattern well in advance and you can always jump in anytime. Especially, since you are ready if needed.

Housing prices on those places and others doesn't look to me significantly going up. If anything, it is still going down. So, if I were you I will take my time and make sure I get into a neighborhood I really like. No need to rush.

From your other post I see that you have an under water house in SH that you can't sale and planning to rent, which is great. I would be very careful to take on another mortgage at the same time. You never know what can happen with the renters. You may have stretch of times that the house sits empty. So, be very careful. Do you have a positive cash flow on the house? (You don't have to answer this to me). If so, that may be good for waiting the market. But if you are still carrying extra cost even with the rent, that's a bad idea. In few months, you are going to feel it when unexpected cost of repair shows up. Also, renters aren't going to take care of the house like you, meaning the house value will only go down even further. If the later is the case, and IF I were you, I would unload the house.

Given all this info, run the numbers if really buying another house is riskier or not. You can use a number of online tools that will let you do what/if scenarios with housing prices and interest rates and all.

Also, make sure you talk to a broker to see that you actually qualify to get a loan as you think you can. Things are very tight now and rules have changed, especially for those who want to buy a second home. You have a job lined up but most would require you to be in that job for some time and probably a tax return or two. You will aslo get hit with interest rate since they may consider your buy as an investment property. That's another reason to think about carrying the SH home foreward. Lots of variables as you can see...

Good luck!

[floridagirl777]

Originally Posted by MeInDenudinFL

My $0.02.

The interest rate doesn't look to go anywhere for the next one to two years, just watch the Fed's action for that. Will they be the same as today? Probably not. But you are not going to see signifcant change from where we are today. Also, keep in mind that interest rates just don't shoot up or down like crazy. You would see the pattern well in advance and you can always jump in anytime. Especially, since you are ready if needed.

Housing prices on those places and others doesn't look to me significantly going up. If anything, it is still going down. So, if I were you I will take my time and make sure I get into a neighborhood I really like. No need to rush.

Excellent advice. Thank you! We talked about it today and came to that same conclusion.

From your other post I see that you have an under water house in SH that you can't sale and planning to rent, which is great. I would be very careful to take on another mortgage at the same time. You never know what can happen with the renters. You may have stretch of times that the house sits empty. So, be very careful. Do you have a positive cash flow on the house? (You don't have to answer this to me). If so, that may be good for waiting the market. But if you are still carrying extra cost even with the rent, that's a bad idea. In few months, you are going to feel it when unexpected cost of repair shows up. Also, renters aren't going to take care of the house like you, meaning the house value will only go down even further. If the later is the case, and IF I were you, I would unload the house.

Given all this info, run the numbers if really buying another house is riskier or not. You can use a number of online tools that will let you do what/if scenarios with housing prices and interest rates and all.

Also, make sure you talk to a broker to see that you actually qualify to get a loan as you think you can. Things are very tight now and rules have changed, especially for those who want to buy a second home. You have a job lined up but most would require you to be in that job for some time and probably a tax return or two. You will aslo get hit with interest rate since they may consider your buy as an investment property. That's another reason to think about carrying the SH home foreward. Lots of variables as you can see...

Good luck!

We spoke with a broker a few weeks ago and qualified for a second loan up to 400K. The amount he quoted us was if we couldn't sell our home and had to carry both mortgages. However, we would NEVER get a second house that is that expensive. We are looking in the 200K range right now, and we factored both mortgage payments into our budget just in case we end up having to carry both if something goes awry with the renters. So, we can get a loan for another home, and we can also afford to carry 2 mortgages if need be as long as we stay around 200K.

To unload the house we would have to pay the difference of what we owe and what we would sell it for. Currently we owe about 140K. We could probably sell it for 100K. We do not have enough saved up to cover the 40K difference, so we looked into taking out personal loans to unload the house … but those kinds of loans have very high interest rates and we simply cannot afford the monthly payment to get it paid back in 5 years like the banks want. Renting is really our only option at this point, unless someone can think of another way to go.

[grammyR]

I am guessing you think it too far to commute? Spring Hill is not that far from Clearwater area coming down US19. It also covers a large area and some parts of Clearwater not so good. Safety Harbor, Palm Hrbor, Dunedin nicer. I am pretty sure you could get a decent one for $200K but I agree that carrying 2 mortgages may be difficult. Just do lots of research of those neighbourhoods first. I don't think there is a lot of decent rentals, personally.

[chi_tino]

Originally Posted by grammyR

I am guessing you think it too far to commute? Spring Hill is not that far from Clearwater area coming down US19.

This is a joke, right? That commute would be about 50 miles of stoplights each way.

[gypsychic]

Originally Posted by chi_tino

This is a joke, right? That commute would be about 50 miles of stoplights each way.

Exactly. No one in their right mind would ever make that commute. I have done it a couple of times and it will make you pull your hair out. (Not to mention the toll it would take on your vehicle). Other than that I agree with grammy about Safety Harbor and Palm Harbor. Much nicer than most of Clearwater.

If I were in your shoes and could afford the two mortgages, I would go ahead and do it. My perception is that the well-priced homes in the nicer, desirable areas have long ago bottomed out and are going up in price. This price range is very popular.

Good luck to you!

[floridagirl777]

Originally Posted by grammyR

I am guessing you think it too far to commute? Spring Hill is not that far from Clearwater area coming down US19. It also covers a large area and some parts of Clearwater not so good. Safety Harbor, Palm Hrbor, Dunedin nicer. I am pretty sure you could get a decent one for $200K but I agree that carrying 2 mortgages may be difficult. Just do lots of research of those neighbourhoods first. I don't think there is a lot of decent rentals, personally.

Yes, the commute would be too difficult on us. It takes us over an hour to get down to Clearwater. Besides, our children are going to be attending school down there, so we'd really like to live in that area since that's where their friends and social lives will be.

Other than that I agree with grammy about Safety Harbor and Palm Harbor. Much nicer than most of Clearwater.

If I were in your shoes and could afford the two mortgages, I would go ahead and do it. My perception is that the well-priced homes in the nicer, desirable areas have long ago bottomed out and are going up in price. This price range is very popular.

We love Safety Harbor … especially the quaint downtown area. Thanks for the advice! We are definitely leaning toward buying sooner rather than later. We are staying away from the southern and western parts of Clearwater. Most of the homes we're interested in are in Safety Harbor and Countryside. Palm Harbor would be great, but it is a little far from the schools our children will be attending.

[Irishiis49]

I think prices in the nicer areas of Palm Harbor have seen the bottom...I wouldn't wait too much longer...once this last dump of foreclosures clear I think prices here in Palm Harbor will rise!