Only if the bank is Lehmans or MF Global. Then it makes sense to me. Owning aging lumber and concrete and expecting it to increase in value just because it has before makes no sense. It ages, gets old, and needs eventually be rebuilt. Land is land, unless you farm it really has little importance. Go out to your overpriced backyard where you hear the steady stream of traffic and ask yourself "why did I pay 200k for this 30x30ft backyard?". Invariably the answer is, "because other people did". Opps
If you have money in a CD you are losing money. Inflation will eat that up.
But we have DE-flation in house prices. So if you're saving your money to buy a house in the future, you're definitely gaining value by waiting, even at 0% interest.
And the percent you can lose on a house is not just the loss divided by the house price. It's the loss divided by your downpayment so the percentage loss of that can be huge. A 2% loss in house value with 20% down means you just lost 10% of your money.
And that's just the start of it. There's also realtor vig, taxes, maintenance, insurance...
The Realtor® needs to understand the whole market is fucked for 2-7 generations and if they understood what it means for people that know nothing else but how to lie to everyone that the only hope they have for living in doors is providing them with a commission they'd be biting the barrel and pulling the trigger behind the Starbucks.
Next time, you'll know what to tell them. . . That and to aim straight up while they're sucking.
So if you're saving your money to buy a house in the future, you're definitely gaining value by waiting, even at 0% interest.
To qualify, no, I'm not interested in a condo that needs that much work and at this time in this market. It's insulting it's being placed on the market in that condition. Besides, there were only two sales (I found) in the last year for that complex and the price per square foot is similiar. The ones that sold had carpet, stove, wardrobe doors, etc., lol. Ironically, I had seen that very same unit when it was new for $110k. It was beautiful then, fresh paint, new berber carpet, and a stunning view of the Los Angeles downtown skyline.
Also, I would like to add, this is one the few top floor units that have been 'released' in over 2 years in the entire 101 corridor of the South San Fernando Valley, Hollywood, and Mid Wilshire areas. What are the chances? No, definitely not time to buy yet.
When I buy homes paying 12 to 15%, I'm really not too worried if the price drops 10% next year....
Just because someone can afford to take a loss, doesn't mean it is not still a loss. Glad you can weather the storm, but just to be safe you better run a 20% drop into your calculator. I don't have a crystal ball, but I do think we are headed down that path. The bleeding stops when we have run out of band-aids. As we see every month the gov't has a whole first aid kit ready to keep this puppy alive.