Home ownership

[storm1977 0]

I am posting this poll because I am curious what the housing situation of skydivers is.

I am looking to buy in the next year or so, and here on Long island am amazed to see how much the prices have gone up over the past 4 years since I have been here.

When I first moved here, the average price for a 3 bdrm 1 bath single story house on a 75'x100' lot was about $220,000 USD. Now that same house goes for about $350,000 USD. That is about a 60% increase in 4 years.

Anyway I was just curious as to the results.

Chris

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Sometimes it is more important to protect LIFE than Liberty

[slug 1]

I'm not a realatorreally

But being a old fart we've seen interest rates for homes go from 6% to 14% approx to 4.5%. over a 40 yr span.

Your seeing rapid inflation in the selling price of a home but the low interest rates are helping to keep the monthly payments from going thru the roof.

Not sure what's going to happen when the rates go back up and people can't afford to buy a home at the higher interest rates.

R.I.P.

[ahegeman 0]

I own a house but it sure as hell didn't cost $350K. Sheesh.

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There is a fine line between 'hobby' and 'mental illness'.
--Dave Barry

[mfrese 0]

Hey, that's not too bad...here in California, just south of San Francisco, your $350,000 USD will buy you a 900 square foot, 2 bedroom, 1 bath condo...no garage, a 3x7 foot "deck", and a $233/month association fee in addition to your mortgage. Cable and utilities are extra. You also get 96 square feet of storage.

My wife and I plan to move to Florida next year, as soon as we can afford to build our house. We plan to build about 4000 square feet with a pool for less than that 900 square foot condo.

Doctor I ain't gonna die,
Just write me an alibi! ---- Lemmy/Slash

[Lindsey 0]

I own a home, but since my husband and I separated I'm also renting. I HATE renting!!!! I will definately buy another house when the divorce is done and when all the property issues are settled.

Peace~
linz

Only 16 weeks left

[mnealtx 0]

I own - it's been vandalized and I'm going to have to rebuild it from the walls in, but I own.

The STBX has asked me when her name is going to be off the mortgage - I told her "when I pay it off or when my credit recovers enough to refinance it, since you weren't paying the bills"

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[lawrocket 3]

I'm hoping in the next year to capitalize on the foreclosure market. I almost bought a house a year and a half ago, and I'm glad I did not.

Houses here were selling within days (even hours) of being on the market. I've since seen a house in my neighborhood that has been on the market for 3 months and lowered the selling price by $50k. Still isn't being sold.

I think plenty of folks who bought a house here in the last year will lose money if they try to sell it in the next five years. Of course, they will likely have to, since many of them are making interest only payments and since the house won't appreciate, they won't have equity.

My wife is hotter than your wife.

[rmsmith 1]

Both the east and west coast regions of the country have experienced considerable appreciation since interest rates are at a 40-yr low and the bursting stock market prompted many to put their money into housing. The biggest problem is that income has remained relatively flat during this same period, and when you combine this with the huge increase in Adjustable Rate Mortgages (ARM) there will be many who will be unable to meet their obligations when the interest rates rise again. This fate is mainly going to fall on the younger less established people who are also going to be expected to digest huge tax increases to pay for the last days of the babyboom generation.

[ianmdrennan 2]

We own 2 homes. 1 rental property and 1 that we actually live in.

The rental property has appreciated approximately $80000 in 3 years the place we live in we haven't lived here long enough for it to appreciate decently yet (although it's fully expected).

It's all about location, seriously. I'd be wary of buying in the highest priced areas, instead we tend to focus our energies on growing markets. everyone has a different strategy though. Just depends what the long term goals are.

Blues,
Ian

Performance Designs Factory Team

[storm1977 0]

Yeah, I was weary of buying a house last year because I wasn't sure if I would be staying in the area, but I do plan to stay around for 10+ years I hope....

BTW - no ARM for me. I rates stay low, I am locking that thing in even if it cost more initially. Unfortunately the house I live in now and I am renting is the one I may be buying. I say unfortunately because the thing was on the market for almost a half million dollars last year. Fortunately the person who owned it is a friend and they offered not to sell and just rent to me for now!!!!!

Maybe the bubble will burst before I buy!!!!

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Sometimes it is more important to protect LIFE than Liberty

[Casurf1978 0]

IMO the ones who will get hurt are those who bought more house than they can afford. Case in point my co-worker, he can barely afford the mortgage for his current house. He should've bought a condo for half the price. Overall from what I've read the real estate market is healthy and growing. It might slow down, but crisis like what happened in the early 90s is highly unlikely. Also even in a hot market an overpriced house will still have problems selling.

http://rismedia.com/index.php/article/articleview/8806/1/1/

http://rismedia.com/index.php/article/articleview/8807/1/1/

[Nightingale 0]

If I hadn't decided to go to law school, I'd have bought a condo or something by now. However, now it's going to have to wait another few years. The trade off will be worth it, though.

At the moment, I'm renting an apartment with a friend.

[livendive 8]

My girlfriend and I built a house a couple years ago, but we split up a few months ago and I'm now renting a house. I'm considering buying something cheap so that I don't eat as much in closing costs if I decide to move out of the area in the next couple of years. But, I'm also thinking of holding off. The question I have is which will end first...the seller's market I currently live in or the low interest rates. I'm hoping the answer to that question will become more apparent in the next 6-9 months.

To echo the response someone else made, I'm pretty concerned about all the young homebuyers I've seen in the last couple years. It seems pretty common that they are buying more house than they can afford by doing the double-loan thing to cover the down. When those ARMs come knocking there's going to be a glut of relatively new homes on the market coming from seller's who have no substantial wiggle room due to a lack of equity. I predict dramatic increases in foreclosures in the next 5 years or so.

Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)

[tigra 0]

In my area, condos aren't half the price of single family homes, they are close to the same price. My friend has a 1 bedroom condo 4 blocks from my 3 bedroom house. She bought a year before me and paid a little bit less-maybe 20K, which isn't a lot over 30 years. Her real estate taxes are about the same and she's got a monthly assessment and an association that tells her she's not allowed to have a Christmas tree or a dog that weighs more than 30 pounds. Just by virtue of buying a house instead of a condo, (our credit and income are pretty similar) I had more mortgage options available to me than she did. I keep telling her she'd be better off with a house!

I do agree its very easy (too easy) to buy more house than you can comfortably afford. My jump numbers have definitely slowed down since I became a homeowner! But a condo wasn't the answer for me!

[penniless 0]

Quote

My girlfriend and I built a house a couple years ago, but we split up a few months ago and I'm now renting a house. I'm considering buying something cheap so that I don't eat as much in closing costs if I decide to move out of the area in the next couple of years. But, I'm also thinking of holding off. The question I have is which will end first...the seller's market I currently live in or the low interest rates. I'm hoping the answer to that question will become more apparent in the next 6-9 months.

To echo the response someone else made, I'm pretty concerned about all the young homebuyers I've seen in the last couple years. It seems pretty common that they are buying more house than they can afford by doing the double-loan thing to cover the down. When those ARMs come knocking there's going to be a glut of relatively new homes on the market coming from seller's who have no substantial wiggle room due to a lack of equity. I predict dramatic increases in foreclosures in the next 5 years or so.

Blues,
Dave

Added to which are record amounts of credit card debt.

[Michele 1]

To give you all an understanding of the market we in SoCA are currently in, a home I sold 4 years ago for $240K to the buyer is now being considered for sale. We think it will likely get $499-520K...and it shouldn't stay on the market for too long.

As for when the seller's market will go away, real estate, like everything else, is cyclic. I expect to have things balanced out - meaning more homes on the market in relation to able buyers - this summer, and we'll continue to see the spin until about March of '06. Once the balance is struck, it's going to be interesting to see what's happening with the economy, and it's ripple effect on the real estate market.

As long as interest rates remain relatively low (under 8%), it probably won't go too far towards the buyer's end of things (i.e. no bubble popping). There will be a settling of the appreciation into something more normal and rational, 10-15% annually rather than the 30-60% annually we are seeing now.

As to the foreclosure market, there will be an increase, but nothing like we saw in the early 90's. The lending laws have tightened up since then, and while there are many people buying more house than they can afford, the conversion from ARMs to 30 years is doing a booming business. So I'm not sure the foreclosure market will be enormous. However, that's still to be seen.

I have yet to have an irreconcillable issue regarding an appraisal, and that's where I'll see it first...once the bank stops lending on the purchase value, and rather begins to lend at a lower price.

And yes, I am a realtor.

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[jimmytavino 16]

bought it in '87..... paid it off in '98..
no mortgage/ no rent is goood.....
taxes are tolerable... the trick is to keep the place in nice shape so it keeps growing in value...and we have done that....Houses in this neighborhood sell fast,,,
So far we haven't had to pull any of the equity outta the house....( we're managing to keep up with the kids' college tuition ) But it's nice to know that we have that "cushion" if we ever need it......
The trick to paying off your mortgage...is.. "Try not to borrow as much as you are "qualified " for "..in other words,, either buy "less house" or "invest" a larger down payment. Then the pricipal amount is NOT overwhelming,,, and your monthly payments can chip away at it,,, more easily...( at a certain point our pricipal balance was less than what I had built up in a modest stock account,,, so I cashed out the account ,,, and paid off the note......) Lucky thing too... cause those couple of stocks wound up taking a real beating in 2000 and 2001,, and would be worth less than half of what they were, back when I cashed them out... whew!!!!

[rmsmith 1]

Quote

To give you all an understanding of the market we in SoCA are currently in, a home I sold 4 years ago for $240K to the buyer is now being considered for sale. We think it will likely get $499-520K...and it shouldn't stay on the market for too long.

And where do your buyers get their money? Could you and your boyfriend or husband buy this house? I guess some young couples are just gifted $100K from their parents for the down payment, and they have a $3,250/per month payment for the balance, right? I'm an engineer, and I have a good gut feel for numbers, and yet I don't have any idea how a family in southern Calirfornia can make ends meet with the above numbers unless family wealth carries them because the local economy's paychecks can't do it.

[Michele 1]

Quote

And where do your buyers get their money? Could you and your boyfriend or husband buy this house? I guess some young couples are just gifted $100K from their parents for the down payment, and they have a $3,250/per month payment for the balance, right? I'm an engineer, and I have a good gut feel for numbers, and yet I don't have any idea how a family in southern Calirfornia can make ends meet with the above numbers unless family wealth carries them because the local economy's paychecks can't do it.

Right now, a lady is "borrowing" 40K from her mother to make the down payment. She can handle the monthly, and so she's comfortable.

OTOH, I just had a conversation with another buyer who I took out showing last week, and he's decided he can't afford what he wants yet.

I just closed on a couple of men who bought a condo. They're at the edge, but they wanted to buy something, so we did. I had them work with a lender I know who handles tough situations, and she made it work for them just fine.

There are two things to consider. The local employment market does indeed pay far more than most average other employment markets. My brother just moved out of state *(because he couldn't afford the house he wanted here)*, and while he could buy out of state with no issues, his rate of pay is reduced. The trade off worked for him, so that decision was all right.

The other thing to consider is that in my market, the affordability index is just about 25-26%. That means the percentage of people who can afford to buy a home is 1/4 of the population. This is not the best news, and if it goes much lower, we will see a slump in local prices. But for the moment, it seems to be holding steady. I don't know the Affordability Index for other areas, but that would be an interesting comparison, and a good accurate picture of the local area.

And no, I couldn't afford to buy the house. I'm single, and my earnings just wouldn't cut it.

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[rmsmith 1]

Here's our new spec home, $125k in eastern Washington state. $50k down, 30yr at 5.50apr means $425.84/month. Two kids and a stay at home mom...no sweat on $73K/yr. The same place in San Jose, CA where I grew up is $675k+, which is far more than a CalTrans civil engineer can afford.

[NWFlyer 2]

When I bought my home two years ago, I set a budget, realized that what was available in that price range was crap, so I increased my budget by about $25,000. That was *still* almost $100,000 less than I qualified for. People get into trouble by saying "Well, if the mortgage company approved me for it, I must be able to afford it." I was, quite frankly, stunned by the amount of money the bank offered me in relation to my overall income and debt levels. Had I taken out that amount, I would have what most people would consider an unhealthy amount of debt. Fortunately, I stuck to it have a reasonable comfortable budget.

In-city prices in Seattle continue to go up, particularly in the "starter home" range, so I'm pretty comfortable with my investment, even though it's a townhouse, not a single-family home. And if this town ever commits to a public transportation solution, that might benefit the home values in my neighborhood. Not counting on that, though!

"There is only one basic human right, the right to do as you damn well please. And with it comes the only basic human duty, the duty to take the consequences." -P.J. O'Rourke

[storm1977 0]

Quote

I predict dramatic increases in foreclosures in the next 5 years or so.

That is an easy prediction to make but not for the alll the reasons you stated.

That fact is, there are more Homeowners now than ever. So, statistically there will probably be more foreclosures than ever in the not too distant future.

The one perk is that for the first 5 years or so of renting the house I may be buying, I will be able to rent the upstairs. It is a Mother-daughter which I would separate, and in this market could easily get 1400-1600/mo in rent for the upstairs.

That would help with the morgage in the beginning, unfortunately it will negate the tax savings I would have received on the interest.

Chris

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Sometimes it is more important to protect LIFE than Liberty

[Jimbo 0]

Quote

unfortunately it will negate the tax savings I would have received on the interest.

It will still likely be a net gain.

-
Jim

"Like" - The modern day comma
Good bye, my friends. You are missed.

[storm1977 0]

Oh yeah definately!!!!!, but it just sux that I will have to claim it as income.... The way I see it, it is a charitable donation to the financial security of my future .

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Sometimes it is more important to protect LIFE than Liberty

[PhillyKev 0]

Quote

To give you all an understanding of the market we in SoCA are currently in, a home I sold 4 years ago for $240K to the buyer is now being considered for sale. We think it will likely get $499-520K...and it shouldn't stay on the market for too long.

I saw a nice little 2 bedroom row house with a 1 car garage down the street from my apartment. Checked it out....it's listed at $950,000.