Now is time to buy a home!

Wow, that's awesome! Tell you what- you go buy up half of Detroit. You can get it for damn near free. Let us know how it works out for you.

actually.. that would probably help Detroit a lot

No kidding.

I have an interesting perspective on the housing bubble just through dumb luck. I owned a home in California for five years. Thing doubled in value. We moved to Denver, sold the California house and bought another home. At first, I felt like a heal because the house in California continued to go up. It got to an insane price- better part of a million dollars for a two bedroom home. My little place in Denver went up a little, but nothing like that.

Then things turned. The house in California started losing value and I started feeling a lot better about not owning it anymore. But the house here in Denver held up pretty well. We're not making money on it, but not losing any either. Overall, that feels like a win.

Point is, yeah, there are places you can get a house for real cheap. There are also places, like Denver, where they're still pretty expensive on the whole. America is a big place.

Detroit is a good example because it was built on an industry that took a pretty heavy hit. So there are a lot of houses there that at one time were homes to families working in that industry. Unless some other industry comes along to provide that number of jobs in the region, it's unlikely those homes will ever be in demand. The first rule of real estate still holds true- location, location, location.

To make blanket statements about buying cheap homes in the US being some kind of great investment is silly.

I'm not an economist or a financial counselor, but it seems to me that your best bet right now is to get the berkeley out of debt. I don't think the European situation is a settled thing yet at all. If that goes over the edge, the US banking system is going to take a hit that nobody can even calculate at this point.

It's always a good time to get out of debt, BUT . . . how many people could buy a home if they had to pay cash? The following graph shows how the economy & people would suffer if the new Qualfied Residential Mortgage rules of a required 20% down and much higher credit scores (what number hasn't been released yet, but the most common numbers talked about are 680-700), much less pay cash.

Because there's been so much going on in Europe and we've had time to prepare, the U.S. is pretty much Europe proof now, short of everything cratering so bad that it looks like after WWII.

If the EUN collapses we might even profit long run.

But in 49 states December was an up month. Tell me that doesn't mean something. October and November also weren't too shabby. Here's a copy of the latest Coincident Report put out by the Feds. It shows the true economy of the states.

Unless you are in one of the harder hit areas it's time to start looking. And as far as hitting bottom, how many actually hit bottom when they buy anything? As long as you are near bottom you are safe unless you need to almost immediately turn around and sell your home. If that's the case you shouldn't be buying in the first place.

agreed on the location, location, location thing. Here in South Jersey, the big money maker is the casinos in Atlantic City. The rest is shore stuff.. all travel and tourism. Once you get about 20miles from the ocean.. the price of housing drops off dramatically. A $300,000 in absecon (first town on the mainland from Atlantic City/brigantine) will drop to about 150 to 175,000 twenty or so miles inland.

I'm not that well versed (no pun intended) but I can't help noticing that in many/most(?) of the states that are doing well (there's that word again), drilling is underway for shale gas/oil.

As I stated in another thread, my sister has a not new house that is in an area where there is almost no new housing. Part of the reason why there is no new building is that land prices have shot up due to the price/cost(?) of mineral rights acquisitions. In concert with the no new housing, you have LOTS of new workers flooding into the area...with no place to live. She is looking at selling her house before 2013, and already has a waiting list for buyers. When my parents moved last year, they had no trouble selling their old house (some prospects had trouble qualifying for a mortgage) and got almost the price they originally asked for. $200,000 for a 3 bedroom, 2 bath house with a double car garage. (We are talking about a rural area, too. An hour or more from any "2nd tier" city.)

Here in Jax, there are several houses near mine for sale. One, has been for sale for at least a year...I'm guessing/hoping they are asking WAAAY too much and that is why it hasn't sold. There are still quite a few empty and/or unsold homes in my area. YET, I would buy if I saw a decent deal.

If only someone would give me a loan I don't have Dr. at the front of my name, so clearly I'm a no-good loser who can't pay back the mortgage.

I'm going to find a duplication on the web and see if I can enlarge it enough to be able to read things without the fuzy overtaking my glasses..

Here tis, but that won't help you. It will still be on a small screen

Coincident Report

Twin_Cam wrote: If only someone would give me a loan I don't have Dr. at the front of my name, so clearly I'm a no-good loser who can't pay back the mortgage.

Doctors are some of the worst credit risks so it might be good you don't have the Dr. in front of your name.

But there's a whole lot more to it than that.

Someone mentioned good debt and bad debt and then there's necessary debt. You need to carry a certain amount of debt to be able to get a good enough credit score that you can get a home loan.

mguar wrote:

carguy123 wrote: It's always a good time to get out of debt, BUT . . . how many people could buy a home if they had to pay cash? The following graph shows how the economy & people would suffer if the new Qualfied Residential Mortgage rules of a required 20% down and much higher credit scores (what number hasn't been released yet, but the most common numbers talked about are 680-700), much less pay cash. Because there's been so much going on in Europe and we've had time to prepare, the U.S. is pretty much Europe proof now, short of everything cratering so bad that it looks like after WWII. If the EUN collapses we might even profit long run. But in 49 states December was an up month. Tell me that doesn't mean something. October and November also weren't too shabby. Here's a copy of the latest Coincident Report put out by the Feds. It shows the true economy of the states. Unless you are in one of the harder hit areas it's time to start looking. And as far as hitting bottom, how many actually hit bottom when they buy anything? As long as you are near bottom you are safe unless you need to almost immediately turn around and sell your home. If that's the case you shouldn't be buying in the first place.

I love the information your charts are showing. I just wish I had a big enough screen so it was completely readable and I could grasp the full impact of it.. I'm going to find a duplication on the web and see if I can enlarge it enough to be able to read things without the fuzy overtaking my glasses..

If you're using firefox, just click on the picture and drag it to the toolbar to open it in a new tab. Alternately, you can right click on it and choose "Open in new tab"...or, you could click here
https://fbcdn-sphotos-a.akamaihd.net/hphotos-ak-ash4/422556_286415331413669_175145092540694_738958_1222820386_n.jpg

Hi iadr.

Welcome to GRM! I hope you enjoy your time here. I suppose I'm late to the party in saying that, since you already have a few posts under your belt.....

iadr wrote: In reply to JoeyM: Actually that's 8 states that aren't holding their own... not 1 or 2.

Go back and read the nested quotations more carefully. You're probably addressing something that mguar or carguy123 said. You'll see that I didn't offer any analysis or opinions as to the content or meaning of the picture.

All I did was tell someone how to access that picture in a larger size.

Done. Just closed on my house in Pittsburgh; a 3/2 on one acre for about $50k. Three years ago it had been on the market for $89k. Feels good that I locked it in now.

SWMBO and I are waiting on our tax return so we can put 25% down in cash on a 2 acre lot, with a 15yr loan that is an ARM after 5, and still have a few $k in the savings account as an emergency cushion. We have a solid plan to have it paid off in 4 years without taking into account if we get raises or bonuses. Once we have the land paid for, our equity can be used as a down payment on the house we plan to build there that will hopefully be the house we raise a family in, retire in, and will to our kids one day.

At 32, this is the farthest in advance "plan" Ive ever had, but it feels good to be doing it right!

4cylndrfury wrote: SWMBO and I are waiting on our tax return so we can put 25% down in cash on a 2 acre lot, with a 15yr loan that is an ARM after 5, and still have a few $k in the savings account as an emergency cushion. We have a solid plan to have it paid off in 4 years without taking into account if we get raises or bonuses. Once we have the land paid for, our equity can be used as a down payment on the house we plan to build there that will hopefully be the house we raise a family in, retire in, and will to our kids one day. At 32, this is the farthest in advance "plan" Ive ever had, but it feels good to be doing it right!

Make sure there's nothing in the contract about having to start building within a certain time window from closing, as (depending on your time to pay off the land) you may not be able to wait that long before being required to build or be faced with some kind of suit from the developer.

mguar wrote: However as badly hit as Minnesota was I'm still more than 1/2 million dollars ahead of what I paid for this place originally.. MY sister paid less than 1/4 of what she sold her house for and has banked over 1/2 million dollars for her retirement. She did that at the bottom of the currant market..

two points:

• you have said that you are of significant age. what year did you buy that place? (my parents bought for $17k in a DC suburb and sold for $425k. Sounds great until you consider the 47 years between purchase and sale, LOL)
• i always wondered where currants came from. i loves me some mince pie!

We just paid cash for our place in a very popular town. We went above what we had planned to spend with the thought that a better house will appreciate more when the economy starts on the upswing again. Also a little sweat equity will help us out.

That said, this town is pretty stable and prices didn't take as big a hit as other areas. The plan is to live her 5-7 years and then sell to move on to bigger things - bigger meaning more land and the same size house.

AngryCorvair wrote: Make sure there's nothing in the contract about having to start building within a certain time window from closing, as (depending on your time to pay off the land) you may not be able to wait that long before being required to build or be faced with some kind of suit from the developer.

Already ahead of you, we have a copy in writing of the land stipulations - there are guidelines for how long you have to finish once ground is broken, how far from the road, outbuilding rules, and exterior materials (all of which are rather lenient, no grass length nazi-ism here). So we are good there. No HOA, just an initial set of rules that must be obeyed.

mguar wrote: That's a great plan. It's similar to what I did.. When you say you plan to build a house there are you thinking of doing it yourself or have it built? I built my own and can tell you how to save a whole lot of money.. Just so you know this is the first time I've ever built a house or did any wood working. I got greedy and all my savings I used to upgrade the house however that's not what you need to do if you don't feel like it..

I have done roofing, framing, carpentry, tile, hardwood, concrete, and woodworking. Im no master, but Id say I can hold my own.

That said, I want, in no way, to be part of the construction process, aside from "I want the door right there, I want the cabinets here, and I want the outlets here and here". Ive done too much of that stuff to: A). want to have to be on schedule so I dont hold up a sub, and also B). to be on the hook when something isnt right. I want to be able to have a home warranty that is backed by an insured home builder, and have the piece of mind that if the pipe bursts or the light falls out of the ceiling, Mrs. 4CF wont be kicking my ass all over the place. Im willing to pay for that assurance. We have a plan that will allow for that expense, and its one Im comfortable with.

mguar wrote:

DaveEstey wrote: We just paid cash for our place in a very popular town. We went above what we had planned to spend with the thought that a better house will appreciate more when the economy starts on the upswing again. Also a little sweat equity will help us out. That said, this town is pretty stable and prices didn't take as big a hit as other areas. The plan is to live her 5-7 years and then sell to move on to bigger things - bigger meaning more land and the same size house.

Do stop and look at the math.There is a flaw in your plan.. You are aware that the first few years you're in a house very little of your monthly payment goes towards the principle. Very little.. the first year you might own a few hundred dollars of your house.. BY 7 years you're starting to build equity but not at a great rate. You need to be more than 1/2 way through your mortgage to be taking a steady chop at the debt.. In general it costs about 10% (that's a rough quick and dirty number but good enough for planning) to sell your house, buy another, and move. 7% realitors fees. Typical a percent or 2 for closing costs and roughly 1% moving costs.. Nope the moving truck doesn't cost that much! It's just that the carpet/drapes/paint won't be right or you'll need new pieces of furniture, an appliance or 2 are near the end of their life or the roof needs to be replaced. etc.. That's ten percent of what the house is worth.. not 10% of your equity. One of three things needs to happen. Either inflation will cause your house to go up in value.. (but that's not a good thing because the house you're looking at will also go up the same percentage) Or you'll need a good pay raise. Or you'll wind up carrying some debt from your old place into the new place.. The buy small and move up approach has made a lot of realtors money.. However it's not the way to build a nest egg. Basically in your time frame you're starting over again with a new mortgage. You're 32 I believe 7 years from now you're 39 you'll get a 30 year mortgage and have it paid off when you're 69... HMMM If you stay put your mortgage will be paid off when you're 62 and you;'ll have a few years to really sock money away for retirement.. You're far better off building a garage or adding bedrooms etc.. than selling and moving.. OH and one further bit of advice.. if you have a 30 year loan and you get a pay raise just put that pay raise into the mortgage payments.. I've friends who paid off their mortgage in 12 years doing that and they saved a lot of money. How much? Quick and dirty a 30 year mortgage triples the cost of your house.. If you buy a $100,000 home by the end of 30 years you will have paid $300,000 for the house.. If you pay it off in 20 years by adding a couple of hundred a month to the payment you'll save about $80,000 If you double the payment you can get it paid off in something like 10 years and save almost double that..

I don't have a mortgage. We paid in full and own the house outright.

Zero debt involved.

Meanwhile, there's all this sqwawking about refinancing. However, so many people can't take advantage of these "RECORD LOW RATES!!!11!" because their houses aren't worth enough to borrow against.

I'm in this boat. Wife has an 850 FICO, I have an 840 and we can't refinance because our house that we bought for $261k in '03 is now worth around $218k and it needs to be $225k for a loan to go through.

I don't want to gamble $450 on an appraisal only to have them say "yeah--still worth $218k".

I have one more mortgage guy to talk to, but I'm not getting my hopes up. Thankfully, our current mortgage is manageable and was a solid loan when we originally got it.

DaveEstey wrote: I don't have a mortgage. We paid in full and own the house outright. Zero debt involved.

Green with envy...well played sir

It felt awful and wonderful signing off on that purchase.

Great because I don't have a mortgage. Awful because my savings is nearly empty and I'm trying to start a bike-engined Locost build.

DaveEstey wrote: Awful because my savings is nearly empty and I'm trying to start a bike-engined Locost build.

Do what I did....only spend on the project car what you can save; i.e. put into savings the same amount that you spend on the car. You'll have to live tight, and the project will be slower to completion, but your savings will not be empty

Where are rates hanging these days?
I bought in the middle of last year at 4.5%. Are they as low as 3.5% yet? I have heard in the past that if you do not drop a point (or close) it is typically not worth it.

jrw1621 wrote: Where are rates hanging these days? I bought in the middle of last year at 4.5%. Are they as low as 3.5% yet? I have heard in the past that if you do not drop a point (or close) it is typically not worth it.

I'm looking right now at a 10 year @ 2.75%.