rain rain go away!
it's been raining for three weeks now. i know we need water but rainy days just make me so lethargic and depressed. i'm solar powered.
anyways, i ran out of milk this morning. ugh - just fyi - oatmeal made with water and powdered creamer is just not the same. good thing i loaded it with blueberries to overcome the bad taste.
so what are your feelings on the house market? i've been doing a lot of reading on it since i was on the market for a house. right now i'm just sitting on the fence waiting for the opportune time. i was surprised that with listings only slightly lower, people are still buying. I thought houses would sit around a little longer as there were a bunch of homes listed after dec. however - many homes have sale pending or sold and the townhouse in mountain view that i was looking at went up 40K already. Not a huge jump, but still, it's the first phase! most of the indicators show that the housing market will dump down even more with all the bad loans that were made. with all the stuff i'm reading, it's better for me to buy in 2008. that's so far from now...
posted by melsybo @ 9:39 AM
5 comments
5 Comments:
One could argue that if you plan to stay where you want to buy for a very long time then the dire forecast for 2008 or whenever is moot.
OTOH, if you are fall in the statistics category of moving out within 5 years due to life changing events (ie getting married, children -> need bigger house & better school district) one could say that from an investment point of view it's very risky and costly from all the transactions. Also, one could make the argument that people who waited in 2000 or before thinking at that time the prices were at the top "missed out" given what we see of today's prices. Perhaps (time will tell) but...
I think the question that should be asked right now is: Should I rent or buy now? I say do the math and then decide what is best for you.
I am in the camp that believes that current housing prices in the BA are not immune to the pressures we are seeing today outside of the BA and that the BA is still in denial and is experiencing a delayed effect. Given the increasing number of exotic loans we've seen in recent years, it seems we went from one bubble to another and this has created a viscious cycle. "Easy money" fueling speculation and driving up prices. The current debt to income ratio in the BA is simply unbelievable and I don't think sustainable and really makes me wonder just how many folks are saving enough for retirement.
Anecdotally...
My former Mgr has recently sold his home in Milpitas. From Zillow, It dropped in value from the top but he did make money. I'm not saying prices are dropping everywhere. I do agree that the housing market is a bunch of micromarkets. I do think there will always be desirable areas that are more resistant to downward pressures but not immune.
Despite the fact that our home purchase price was relatively lower than in the BA, we did buy near the top. And believe it or not, our area is considered a "bubble" area given the historical pricing here. I've noticed that inventory is taking a lot longer to clear. But there is no panic selling around here yet.. If in 2.5 years, we are in the red, we may try to keep our current house as a rental since we are very close to the university here.
well the original plan was to have a place to live plus rent out a few rooms and then turn it into a rental later on. However after running the numbers, the type of place we want will require us to sell the investment property.
another option is to go for a cheaper place later on and keep the rental.
I would say if i were buying a house right now and meant to stay in it for 30 years - then 1-2 years waiting wouldn't make much difference in the whole scheme of things. however from a financial point of view, it's not maximizing my investment. since i can wait, i would rather maximize my investment. therefore the plan is to continue saving up for a larger downpayment. I can currently save up a lot more money than i would if i purchased and waited for the property to appreciate enough for me to cash out and have a downpayment from the sale.
therefore my conclusion - buy if you know you've found a place you're staying in for 30 years and it's your dream home. sit and wait if you have not found nor can afford that dream home yet.
the weather this week is going to be incredible. whatever you did made the rain go away!
For some reason, no matter what your post topic is, I always crave dim sum whenever I visit. ;)
hydride - well i did my special rain dance using secret chinese black magic to make the rain go away. haha...
i always remember asking jae a question and i will always remember his funny response. "korean black magic!" although i don't remember what my question was about.
cindy - ah yes! you should definitely go eat some dim sum. haw gow is the bestest!
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